BNG CB Loan Classification for Banks

Updated on: Jun 27, 2025

Latest Event


  • Jun. 2025 Revised Forms
  • On Jun. 25, 2025, BNG CB provided revised classification reporting forms (CL-1 to CL-5) which must be generated directly from each bank’s core banking system (CBS).
  • A new template (T_PS_Q_LN_PROV) for loan classification and provisioning reporting via enterprise data warehouse (EDW) has been uploaded on the BNG CB website.
  • Banks must report both domestic and offshore banking unit CL statements using the updated forms and EDW template starting from the quarter ending Sep. 30, 2025.
  • The definition of past due/overdue and the classification criteria for fixed term loans have been clarified, in order to ensure uniform interpretation and reporting.
  • Fixed term loans will be considered sub-standard if unpaid installments due within 3 months are equal to or exceed the total amount of installments due during that period.
  • BNG CB also reiterated that continuous loans must be fully settled or renewed within the original tenor; loans cannot be de-classified until past-due amounts are paid.
  • Banks may not roll excess balances into new or separate facilities during renewal.
  • The two directives are effective from Jun. 25, 2025.

On Nov. 27, BNG CB wrote regarding loan classification and IFRS 9.

  • BNG CB issued master circular with respect to loan classification and provisioning.
  • Namely, to implement expected credit loss (ECL) methodology-based provisioning system for banks, per IFRS 9, by 2027; circular states certain circulars superseded.
  • Follows BNG CB Feb. 2023 issued rules on loan classification, provisioning, #162207.
  • Master Circular Overview
  • Specifies categories of loans and advances which are grouped into four categories including continuous loan, demand loan, fixed term loan, short-term agricultural credit.
  • Basis for loan classification (LC) involves objective criteria and qualitative judgment.
  • For finalization of CL, sub-standard, doubtful or bad/loss loads on the basis of both objective criteria and qualitative judgment will be treated as non-performing loans.
  • It also covers accounting of the interest of classified loans; maintenance of, and base for, provision; eligible collateral; in addition, general instructions and reporting.
  • Other Aspects
  • Instructions given in BRPD circular no. 14/2012 and its subsequent modifications through any circulars or circular letters will be superseded by this circular.
  • However, for provisioning of off-balance sheet exposures, the BRPD circular no. 06/2023 and any subsequent instructions related to this will have to be adhered to.
  • Effectiveness
  • This master circular, of Nov. 27, 2024, will be effective from Apr. 1, 2025.
  • Dec. 2024 Subcategories
  • On Dec. 22, 2024, BNG CB divided unclassified loans (standard) into 3 subcategories.
  • Specific codes must be used to report information on SBS-3, interest rate classifications; directive effective for quarterly reports from the reporting period Apr. to Jun. 2025 and for monthly reports, the directive will take effect from Jun. 2025.
  • Document dated Dec. 22, 2024, received from BNG CB Dec. 23, summarized Dec. 27.
  • In Jan. 2025, BNG CB issued circular re ECL-based loan classification, see #241407.
  • Jun. 2025 Revised Forms
  • On Jun. 25, 2025, BNG CB provided revised classification reporting forms (CL-1 to CL-5) which must be generated directly from each bank’s core banking system (CBS).
  • A new template (T_PS_Q_LN_PROV) for loan classification and provisioning reporting via enterprise data warehouse (EDW) has been uploaded on the BNG CB website.
  • Banks must report both domestic and offshore banking unit CL statements using the updated forms and EDW template starting from the quarter ending Sep. 30, 2025.
  • The definition of past due/overdue and the classification criteria for fixed term loans have been clarified, in order to ensure uniform interpretation and reporting.
  • Fixed term loans will be considered sub-standard if unpaid installments due within 3 months are equal to or exceed the total amount of installments due during that period.
  • BNG CB also reiterated that continuous loans must be fully settled or renewed within the original tenor; loans cannot be de-classified until past-due amounts are paid.
  • Banks may not roll excess balances into new or separate facilities during renewal.
  • The two directives are effective from Jun. 25, 2025.
Regulators
BNG CB
Entity Types
Auditor; Bank
Reference
Cir BRPD 6, BRPD 5, 6/25/2025; Cir SD No. 2, 12/22/2024; Cir BRPD No. 15, 11/27/2024; IFRS 9;
Functions
Accounting; Actuarial and Valuation; Compliance; Financial; Reporting
Countries
Bangladesh
Category
State
N/A
Products
Banking; Loan
Rule Type
Final
Regions
AP
Rule Date
Nov 27, 2024
Effective Date
Sep 30, 2025
Rule ID
234924
Linked to
Reg. Last Update
Jun 25, 2025
Report Section
International