Welcome

To

Classification
S.M. Aminur Rahman

Classification of
Investment under
BB Circular and
Preparation of CL
Statement.

The loan which does not perform is known as

NPL(Classified). What does it mean? Normally
money received against loans and investments
are used in business and generate profit and
pay back banks dues within the scheduled
time. When business could not generate profit
and fails to repay the banks installment as per
schedule time is known as NPL. There are
Central Banks Guidelines and banks own
policy to address such NPL.

Types of
Classified
Loan:

SS = substandard = 3 Months (20%)

DF =Doubtful
=6+ to 9 Months(50%)
BL =Bad & Loss
=9+ to 12 Months (100%)

Beside this an early warning is also there which is

known as SMA= Special Mention Account(Starts
from due date to 2 months)

Rate of Provision:
Short

Consumer Financing

Term
Agri

HF

loan

Other
Than
HF, LP

Stan
dard
SMA

2.5%

5%

2%

2%

0.25%

2%

1%

5%

2%

2%

0.25%

2%

1%

SS

5%

20%

20%

20%

20%

20%

20%

DF

5%

50%

50%

50%

50%

50%

50%

B/L

100%

100%

100%

100%

100%

100%

100%

Particulars

UC

Classified

LP

Loans
SMEF

to

BHs/M

Bs/SDs

Off Balance Sheet Exposure ---------------------1%

All
other

Credit

CONTD..
Here:
BHs
MBs
SD
LP
HF

SMEF= SME Financing

= Brokerage House
=Merchant Bank
= Stock Dealers
= Loan for Professionals
= House Finance

For Agri loan, Classification duration is little bit

different.

SS =12 Months
DF =36 Months
BL= 60 Months.

If good loans / Investments turn into NPL, then

bank will not get any benefit out of this
investment. So due importance has to be
extended to this area, so that loans/ investment
does not turn into bad. As such management of
NPL is important and due attention has to be
provided by the bank.
In order to keep loans / Investments in good
condition proper and timely monitoring is must.
A monitoring department under loans and
investments division will have to work
continuously. In practice sometime loans become
non performing due to various reasons. What
bank will do then? Central Bank and Banks own
guideline have to be applied to provide some

There are Investment classification

Rules which are mentioned below in a
summarize form:

SMA-----02 Months.
SS--------03 Months (SMA-02 Months +01 Months)
DF-------06 Months (SS-03 Months + 03 Months)
BL-------09 Months (DF-06 Months+ 03 Months)

Up to 10.00 Lac Fixed Term Loan:

SMA-----------------03 Months
SS--------------------06 Months
DF--------------------09 Months
BL--------------------12 Months.

AGRI LOAN
After expiry of period, the loan will remain
irregular up to 12 months. i.e. after 13
months it will remain till 36 months.
DF------------

37 Months to 60 Months.
BL-------------60 Months and Above.

As per Bangladesh Bank Circular quarterly

statement of CL has to be submitted to BB.