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Prudential Regulations Report 1.0
Prudential Regulations Report 1.0
Prudential Regulations Report 1.0
Introduction
Corporate Governance
Board of Directors
Adviser
CEO
within 35% of the total capital. Also funded facilities must not be over 15% of the
total capital of the bank. Non-funded facilities can be provided to the single
borrower but keeping the total outstanding within the 35% limit.
Rescheduling of Loans
Up to BDT 1.00 Cr
15%
Write Off
If a bank debt isn't paid, the bank can write off the overpaid bill as a bad debt. In a
write-off, the bank includes a bad debt as an uncollectible loss on its balance sheet. The write-off reduces
the bank's earnings and thereby reduces its taxable income. Loans classified as Bad/Loss can be written
off anytime. Bad/loss classified loan which have been classified as such for 5 years and there is provision
for it, must be written off immediately. Before writing off a loan, case must be filed in the court for legal
action. Banks should have a department solely to recover the written off loans.
Payment of Dividend
Banks can pay their dividend if the following regulations are compliant.
For dividend of 20%, an amount which is equal to the excess amount over
20% must be kept in the dividend equalization account.
Banks have to seek prior approval from Bangladesh Bank if there is any audit
issue relating to the dividend payment in the previous year.
o
Banks can freely set the rates of both deposit and lending. The only exception is the
interest rate of lending in export sector. The highest rate for lending in export sector
can be 7% per annum.
o
Bank Charges
Banks can set their own charges and fees as they deem fit for the service they
provide to the clients. There must not be any discrimination among same group of
clients who are availing the same service. Banks must prepare their schedule of
charge and keep it publicly available in the branches. BRPD must be kept updated
with the schedule of charges.
Recommendation
Conclusion