Website: www.bb.org.

bd
Banking Regulation & Policy Department
Bangladesh Bank
Head Office
Dhaka
December 21, 2014
Date: -----------------------------Poush 07, 1421

BRPD Circular No- 18

Managing Directors and Chief Executive Officers
All Scheduled Banks in Bangladesh
Dear Sir,

Implementation of Basel III in Bangladesh

Please refer to BRPD Circular No.07 dated March 31, 2014 on captioned subject.
2. An Action Plan/Roadmap was issued for implementation of Basel-III in Bangladesh
vide the above mentioned circular. For effective implementation of Basel-III, the Guidelines on
Risk Based Capital Adequacy (Revised Regulatory Capital Framework in line with Basel III) has
been gone through a rigorous review and consultative process since the issuance of Roadmap.
After accommodating the comments and reviews from different stakeholders on the draft, the
Guidelines has been finalized and issued vide this circular. This, Guidelines on Risk Based
Capital Adequacy (Revised Regulatory Capital Framework for banks in line with Basel III) will
replace Guidelines on Risk Based Capital Adequacy (Revised Regulatory Capital Framework
for banks in line with Basel II) issued vide BRPD Circular No. 35/2010.
3. Consequentially, the Action Plan/Roadmap vide BRPD Circular No.07 dated March
31, 2014 has been revised (Annex-1).
4. Guidance Note on Liquidity Coverage Ratio (LCR) & Net Stable Funding Ratio
(NSFR) will be issued accordingly by December, 2014.
This circular shall come into force with effect from January 01, 2015.
Please acknowledge receipt.
Yours Sincerely
Encl: As stated above

SD/(Chowdhury Md. Feroz Bin Alam)

General Manager
Phone-9530252
E-mail: chowdhury.feroz@bb.org.bd

2. General Instructions on Capital Adequacy Framework

2.1 Capital to Risk-weighted Asset Ratio
The Capital to Risk-weighted Asset Ratio (CRAR) is calculated by taking eligible regulatory capital as
numerator and total RWA as denominator.
Total Eligible Capital
CRAR =
Credit RWA + Market RWA + Operational RWA

2.2 Measurement of Risk-weighted Asset

In order to calculate Capital to Risk-weighted Asset Ratio (CRAR), banks are required to calculate their
Risk Weighted Assets (RWA) on the basis of credit, market, and operational risks. Total RWA will be
determined by multiplying the amount of capital charge for market risk and operational risk by the
reciprocal of the minimum CRAR and adding the resulting figures to the sum of risk weighted assets for
credit risk. The methodologies to calculate RWA for each of these risk categories are described in detail
in relevant chapters.

2.3 Scope of Application

These guidelines apply to all scheduled banks on Solo basis as well as on Consolidated basis
whereSolo Basis refers to all position of the bank and its local and overseas branches/offices; and
Consolidated Basis refers to all position of the bank (including its local and overseas
branches/offices) and its subsidiary company/companies engaged in financial (excluding insurance)
activities like merchant banks, brokerage firms, discount houses, etc (if any).

2.4 Reporting Requirement

CRAR Reporting: All banks are required to submit the CRAR report quarterly (according to the
prescribed formats of Department of Off-site Supervision (DOS) under EDW) on consolidated as well as
on solo basis by the end of the month following the end of each quarter to DOS of BB.
ICAAP Reporting: Each bank must submit its ICAAP report to Banking Regulation and Policy
Department (BRPD) of BB in both hard and soft format within May 31 of every year based on the latest
audited financial report 4. The ICAAP reporting must be approved by the Board of Directors of the banks
before submitting to BB.
4

The banks that close their account at the end of June, they should submit its ICAAP report to Banking Regulation and Policy Department
(BRPD) of BB in both hard and soft format within November 30 of every year based on the latest audited financial report.