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Under the incentive package, clients can apply for a loan without complying with the requirements of the internal credit risk rating policy (ICRR) formulated by Bangladesh Bank. As a result
The debt process has become easier. The decision was made due to the coronavirus, which limited official activities and disrupted ICRR activities and disrupted the provision of necessary documents to recipients.
The Bank Policy and Banking Regulation Department of the Bank of Bangladesh issued a circular on the matter on Sunday.
The circular says that in this catastrophic situation, banks could make loans even without completing the ICRR to provide incentive package loan facilities to accelerate their activities in the industry and services sector. However, each bank will select clients based on the banker-client relationship after analyzing the loan risk under their existing policy. In this case, each client must complete a specific form, which has been attached to the circular.
It is worth mentioning that Governor Fazle Kabir launched the new credit risk measurement policy in the auditorium of the Bangladesh Bank Management Institute (BIBM) on January 17, 2019 in the context of delinquent loans in the country’s banks. The policy, called the Internal Credit Risk Rating (ICRR), stipulates the evaluation of both the amount and the quality of the loan.
In accordance with ICRR policy, banks will classify a customer into four categories: Excellent, Good, Marginal, and Unacceptable. If a customer gets an ‘excellent’ rating, the bank may grant him a loan. Even if you get a “good” rating, the bank can still give you a loan. The bank must be careful when renewing old loans or making new loans to “marginal” rated clients. Under no circumstances will banks be able to make new loans to those with an ‘unacceptable’ rating unless the previous loan is repaid in cash or the loan is covered by a guarantee.
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