Classified
DF
5%
50%
50%
50%
50%
50%
B/L
100%
100%
100%
100%
100%
100%
Besides, banks are required to maintain general provision against Off-balance sheet exposures in the following manner: (i)
@ 0.5% provision effective from December 31, 2007 and
(ii)
@ 1% provision effective from December 31, 2008.
Other instructions such as Eligible securities in determining base for provision along with a revised format for submitting the report on classification of loans and advances are also provided in the respective circulars. Reference: •
BRPD circular no: 05, dated June 5, 2006.
•
BRPD circular no: 08, dated August 07, 2007
•
BRPD circular no: 10, dated September 18, 2007
•
BRPD circular no: 05, dated April 29, 2008
3.2.6 Foreign Exchange System On March 24, 1994 Bangladesh Taka (domestic currency) was declared convertible for current transactions in terms of Article VIII of the IMF Articles of Agreement. Consequent to this, current external settlements for trade in goods and services and for amortization payments on foreign borrowings can be made through banks authorized to deal in foreign exchange, without prior central bank authorization. However, because resident owned capital is not freely transferable abroad (Taka is not yet convertible on capital account), some current settlements beyond certain indicative limits are subject to bonfires checks. Direct investments of non-residents in the industrial sector and portfolio investments of non-residents through stock exchanges are reparable abroad, as also are capital gains and profits/dividends thereon. Investment abroad of resident-owned capital is subject to prior Bangladesh Bank approval, which is allowed only sparingly.