Dhaka, Sep 29 (UNB)-Bangladesh Bank (BB) has made it mandatory for all banks and financial institutions to report private sector foreign loans, including suppliers’ credit, to the central bank's Credit Information Bureau (CIB) database.
The central bank issued a directive on Monday and sent it to the top executives of all commercial banks. The new instruction, aimed at improving financial sector governance, will be effective from November this year.
Currently, foreign loan data is not included in the CIB database. This exclusion means the CIB report does not reflect the borrower's true debt burden, potentially allowing an entity that has failed to repay a foreign loan to still obtain a new local loan.
By including foreign loan information, the BB expects to increase transparency and accountability in the banking sector, improve loan risk management, and allow banks and NBFIs (finance companies) to assess a customer's creditworthiness and risk more efficiently before approving a loan.
Help maintain credit discipline in the financial sector, potentially enhance the nation's international credit rating and strengthen the confidence of foreign investors and international organisations.
The circular outlines several specific reporting requirements for banks to report mandatory information on all foreign loans for individuals/institutions, whether approved by the Bangladesh Investment Development Authority (BIDA) or Bangladesh Bank, must be reported. Foreign credit facilities that do not require BIDA or BB approval but do not create any liability for the bank must also be reported.
The central bank instructed that associated parties’ data must be reported for all interested parties, including directors, shareholders holding more than 20 percent of shares, and guarantors.
The foreign lender and approving authorities’ name, address, and country of the foreign lender, as well as the local approval authority (such as BIDA, BB-FEID, or BB-FEPD), must be reported for every foreign loan.
Besides, all foreign loan information must be reported in the approved foreign currency. Additionally, the outstanding and overdue amounts must also be reported in the equivalent of US dollars.
Data up to October 2025 and all subsequent loan information must be reported every month starting from November 1 this year. Any new loan, adjustment, or change must be reported to the CIB database in ‘Real Time’, as stated in the directive.