BB issues new guidelines for credit risk management

Bangladesh Bank has issued a set of guidelines for credit risk management for the country's scheduled banks with an aim to make the system more effective and time-befitting.

The Banking Regulations and Policy Department (BRPD) of the central bank informed the media on Tuesday about the newly-adopted "Guidelines on Internal Credit Risk Rating System for Banks".

The new model and guidelines will remain effective until June 30, 2019, said the BB circular, reports UNB.

The central bank said once the new guidelines are followed properly,  proper persons and organisation will get loans easily and the volume of the default loans of banks would be reduced.

The restructured guidelines on credit risk management were issued at a time when the country's economists are concerned over the rising trend of the default and non-performing loans in the banking sector.

The circular said the new model of guidelines has 20 sub-sectors under four main sectors.

Meanwhile, 20 individual models were also included in the guidelines considering the characteristics, risk, financial capacity and efficiency of the management of each of the sub-sectors.