Definition of loan defaulters remains unchanged
Friday, 31 August 2007
FE Report
The amendments to the Bank Companies Act, 1991 does not have any provision to change the definition of loan defaulters, the Bangladesh Bank (BB) said Wednesday in response to reports published in the media that an amendment has been made in this respect.
"The existing definition of loan defaulters remains unchanged," the central bank said in a press statement following press reports published Wednesday.
Under the existing definition, a borrower, individual or organisation, will be considered as defaulter after six months from the date a loan with interest becomes outstanding.
Different media reported that the definition was amended, reducing the period to three months from six months.
The caretaker government has approved some amendments to the Bank Companies Act 1991 to ensure good governances in the banking sector through strengthening monitoring and supervisions of the central bank.
President will now issue an ordinance -Bank Companies (Amendment) Ordinance 2007 for implantation of the rules and regulations for bank companies.
The amendment proposes a rise in the total capital of commercial banks to Tk 2.0 billion from the existing Tk 1.00 billion.
"The amendment was needed to keep the financial strength of banks safe and sound," Senior Executive Director of the BB Murshid Kuli Khan told reporters Wednesday, adding that the country's banking sector would be more vibrant and dynamic.
The central bank earlier recommended the double amount of the capital in line with the BASEL-II.
Bangladesh is planning to implement the Basel-II framework for bank companies from early 2009 in line with the global standard.
The new Basel accord has been prepared on the basis of three pillars: minimum capital requirement, supervisory review process and market discipline.
The amendments to the Bank Companies Act, 1991 does not have any provision to change the definition of loan defaulters, the Bangladesh Bank (BB) said Wednesday in response to reports published in the media that an amendment has been made in this respect.
"The existing definition of loan defaulters remains unchanged," the central bank said in a press statement following press reports published Wednesday.
Under the existing definition, a borrower, individual or organisation, will be considered as defaulter after six months from the date a loan with interest becomes outstanding.
Different media reported that the definition was amended, reducing the period to three months from six months.
The caretaker government has approved some amendments to the Bank Companies Act 1991 to ensure good governances in the banking sector through strengthening monitoring and supervisions of the central bank.
President will now issue an ordinance -Bank Companies (Amendment) Ordinance 2007 for implantation of the rules and regulations for bank companies.
The amendment proposes a rise in the total capital of commercial banks to Tk 2.0 billion from the existing Tk 1.00 billion.
"The amendment was needed to keep the financial strength of banks safe and sound," Senior Executive Director of the BB Murshid Kuli Khan told reporters Wednesday, adding that the country's banking sector would be more vibrant and dynamic.
The central bank earlier recommended the double amount of the capital in line with the BASEL-II.
Bangladesh is planning to implement the Basel-II framework for bank companies from early 2009 in line with the global standard.
The new Basel accord has been prepared on the basis of three pillars: minimum capital requirement, supervisory review process and market discipline.