Defaulted Loan Vs Classified Loan

⟳ UPDATED — March 2026 | BRPD Circular No. 15/2024 (Effective 01 April 2025)

Defaulted Loan vs Classified Loan

⚠ Important Regulatory Update: This post has been fully updated to reflect BRPD Circular No. 15, dated 27 November 2024, issued by Bangladesh Bank — the current Master Circular on Loan Classification and Provisioning. It supersedes BRPD Circular No. 14/2012 and all subsequent modifications. Effective from 01 April 2025.

প্রথমেই বলে নেই খেলাপী ঋণ বিষয়টি কেন গুরুত্ত্বপূর্ণ। ব্যাংক কোম্পানী আইন, ১৯৯১ এর ২৭ ক ক (৩) ধারা অনুযায়ী কোন খেলাপী ঋণ গ্রহীতার অনুকূলে কোন ব্যাংক-কোম্পানী বা আর্থিক প্রতিষ্ঠান কোনরূপ ঋণ সুবিধা প্রদান করিবে না। অর্থাৎ যদি কোন ঋণ খেলাপীকে ঋণ সুবিধা (ফান্ডেড বা নন-ফান্ডেড) প্রদান করা হয়, তাহলে তা সরাসরি আইনের বরখেলাপ হবে। এবং এ বিষয়টি পরবর্তীতে উৎঘাটিত হলে সংশিষ্ট ক্রেডিট অফিসারকে অনেক চড়া মূল্য দিতে হবে।

Legal Definition of a Defaulted Loan Borrower

ব্যাংক কোম্পানী আইন, ১৯৯১ এর ৫ গ গ ধারা অনুযায়ী "খেলাপী ঋণ গ্রহীতা" অর্থ কোন দেনাদার ব্যক্তি বা প্রতিষ্ঠান বা কোম্পানী যাহার নিজের বা স্বার্থ সংশ্লিষ্ট প্রতিষ্ঠানের অনুকূলে প্রদত্ত অগ্রীম, ঋণ বা অন্য কোন আর্থিক সুবিধা বা উহার অংশ বা উহার উপর অর্জিত সুদ বা উহার মুনাফা বাংলাদেশ ব্যাংক কর্তৃক জারীকৃত সংজ্ঞা অনুযায়ী মেয়াদোত্তীর্ণ হওয়ার ৬ (ছয়) মাস অতিবাহিত হইয়াছে।

আইনে খেলাপী ঋণ গ্রহীতার সংজ্ঞায় উল্লেখযোগ্য হলো — "বাংলাদেশ ব্যাংক কর্তৃক জারীকৃত সংজ্ঞা অনুযায়ী মেয়াদোত্তীর্ণ হওয়ার ৬ (ছয়) মাস অতিবাহিত হইয়াছে।" তাই মেয়াদোত্তীর্ণ (Past Due/Overdue) কবে থেকে গণনা হবে সেটি নির্ধারণ করে বাংলাদেশ ব্যাংকের সার্কুলার।

Current Framework: BRPD Circular No. 15/2024

Source: Bangladesh Bank, Banking Regulation & Policy Department | BRPD Circular No. 15 | 27 November 2024 | Effective: 01 April 2025

Categories of Loans and Advances

All loans and advances are grouped into four categories for classification purposes:

Category	Description	Examples
Continuous Loan	Accounts with transactions within a limit, having an expiry date for full adjustment	Cash Credit (CC), Overdraft (OD)
Demand Loan	Loans repayable on demand; also includes forced loans (contingent liabilities turned loan without prior approval)	Post Import Financing (PAD, LIM, LTR), Foreign Bill Purchased, Inland Bill Purchased
Fixed Term Loan	Loans repayable within a specific time under a fixed repayment schedule	Term Loans, Project Finance
Short-term Agricultural Credit	Short-term agri credits repayable within 12 months as per ACD of Bangladesh Bank	Crop loans, Seasonal agri credit

Definition of Past Due / Overdue

New Rule (BRPD 15/2024): All loans will be treated as past due/overdue from the following day of the expiry date (or creation of forced loan, or due date if not repaid/renewed).

Exception for Fixed Term Loan: If any installment(s) is not repaid within the fixed expiry/due date, the unpaid amount is treated as past due/overdue from the following day of the expiry/due date itself — not after 6 months. This is a major change from previous circular (BRPD 03/2019).

New 7-Tier Classification System

BRPD Circular No. 15/2024 introduces a 7-tier classification, replacing the old 5-category system. The new categories under Objective Criteria are:

CL Category	Status	Period of Past Due / Overdue	Provision Rate
STD-0	Unclassified	No past due	1% on outstanding
STD-1	Unclassified	≥ 1 day but < 1 month	1% on outstanding
STD-2	Unclassified	≥ 1 month but < 2 months	1% on outstanding
SMA	Unclassified	≥ 2 months but < 3 months	5% on outstanding
SS (Sub-Standard)	Classified / NPL	≥ 3 months but < 6 months	20% of base
DF (Doubtful)	Classified / NPL	≥ 6 months but < 12 months	50% of base
B/L (Bad/Loss)	Classified / NPL	≥ 12 months	100% of base

✔ Key Rule: SS, DF and B/L are classified loans = Non-Performing Loans (NPL). STD-0, STD-1, STD-2 and SMA are unclassified loans.

Classified Loan vs Defaulted Loan — The Critical Distinction

এখানেই মূল পার্থক্য। একটি ঋণ শ্রেণীকৃত (Classified) হওয়া মানেই খেলাপী (Defaulted) নয়।

Continuous Loan & Demand Loan

Scenario	Position
Expiry Date এর পরের দিন থেকে	Past Due শুরু
Past Due ≥ 3 months but < 6 months	SS (Classified, but NOT Defaulted)
Past Due ≥ 6 months	Classified + DEFAULTED (Bank Company Act, Section 5GaGa)

Important: A portion of SS loans will be reported as defaulted loans (per Clause 6(c)(ii) of BRPD 15/2024). For Continuous and Demand Loans: SS loans with 3 months to 5 months 29 days of past due = Classified but NOT Defaulted. Once past due reaches 6 months → Classified AND Defaulted.

Fixed Term Loan (Updated — Major Change)

Under BRPD Circular No. 03/2019 (now superseded), Fixed Term Loans had a 6-month grace before being treated as "overdue." Under BRPD Circular No. 15/2024:

Scenario	Position (BRPD 15/2024 — from 01 Apr 2025)
Installment due but unpaid	Past due from the following day of installment due date
Past Due ≥ 3 months but < 6 months	SS (Classified, but NOT Defaulted)
Past Due ≥ 6 months but < 12 months	DF — Classified AND Defaulted
Past Due ≥ 12 months	B/L — Classified + Defaulted

⚠ Key Change for Fixed Term Loan: Under the old BRPD 03/2019, Fixed Term Loans were treated as overdue only after 6 months from the installment due date, meaning default could only occur from 12 months. Under BRPD 15/2024 (effective April 2025), past due starts the very next day of the due date, making the classification and default timelines faster by 6 months. This stricter standard aligns Bangladesh with international best practices (IFRS 9 / Basel III).

Qualitative Judgment — Classification Beyond Numbers

Beyond objective criteria (days past due), banks can also classify loans based on Qualitative Judgment — perceived risk factors even if no past due exists. BRPD 15/2024 provides detailed indicative factors for each tier:

Classify as	Obligor-Side Triggers (examples)
SMA	Occasional overdrawn, below-average profitability, barely acceptable liquidity
SS	Recurrent overdrawn, low turnover, weak management, doubts about management integrity
DF	Permanent overdrawn, operational losses, illiquidity, very poor/hostile management
B/L	Loans to finance operational losses, money laundering/fraud/embezzlement, no repayment source except liquidation

Final Classification Rule: Both objective criteria AND qualitative judgment assessments are done. The worse (more severe) result is the final classification.

Interest Accounting of Classified Loans

Classification	Interest Treatment
SS and DF	Interest credited to Interest Suspense Account (not Income Account)
B/L	Interest charging ceases; any interest charged goes to Interest Suspense
Rescheduled Loans	Unrealized interest → Interest Suspense Account

Provision Rates — BRPD Circular No. 15/2024

Category	Type of Provision	Rate
STD-0, STD-1, STD-2	General Provision	1% of loan outstanding
SMA	General Provision	5% of loan outstanding
SS	Specific Provision	20% of base for provision
DF	Specific Provision	50% of base for provision
B/L	Specific Provision	100% of base for provision

Eligible Collateral for Base Calculation (select examples): 100% of deposit under lien; 100% of government bond/savings certificate under lien; 100% of government/Bangladesh Bank/AAA-rated MDB guarantee; 100% of market value of gold pledged; 50% of marketable commodities under bank's control; up to 50% of land and building; 50% of average 6-month stock market value (for listed shares).

Minimum 15% Rule: For most collateral types, specific provision must be maintained on the greater of: (i) outstanding minus interest suspense minus collateral value, OR (ii) 15% of the outstanding balance. This floor protects against over-reliance on collateral.

NPL Situation in Bangladesh — 2025 Update

Understanding the context is important for any banking professional:

Period	NPL Amount (Tk Lakh Crore)	% of Total Loans
December 2023	1.45	~9.0%
June 2024	2.11	12.56%
December 2024	3.46	20.20%
March 2025	4.20	24.13%
June 2025	6.08	~34.6%
September 2025	6.44	35.73%

Context: Bangladesh now ranks highest in Asia in terms of NPL ratio (ADB Report 2023 data; situation worsened in 2025). Key causes: stricter classification post-BRPD 15/2024, uncovering of previously concealed bad loans from the Awami League era, defaults by large conglomerates (S Alam Group, Beximco Group), and alignment with international standards. By September 2025, state-owned banks had an NPL rate of ~44%, private banks ~32.9%.

Reporting Requirements

• Classification on quarterly basis (CL-1 to CL-5 forms)
• CL-1 summary to be uploaded in Bangladesh Bank's Enterprise Data Warehouse (EDW)
• CL-1 submitted within 15th of the next month after quarter-end
• Classification status of each loan reported to CIB (Credit Information Bureau)
• Non-compliance may attract penalty
• Islamic banks must also follow BRPD 15/2024 for their investments
• Off-Balance Sheet provisioning: follow BRPD Circular No. 06/2023

Declassification (Improvement in CL)

• Objective basis: Move to better category upon payment of past due amount
• Qualitative basis (bank classified): MD/CEO can move from B/L → DF or DF → SS with justification; Board of Directors must approve SS → SMA/STD
• Bangladesh Bank inspection classified: Cannot be declassified without BB's consent

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📋 Quick Summary Table — Exam Ready

Concept	Key Fact
Governing Circular	BRPD Circular No. 15/2024 (dated 27 Nov 2024, effective 01 Apr 2025)
Supersedes	BRPD Circular No. 14/2012 and all its modifications
Loan Categories	4: Continuous, Demand, Fixed Term, Short-term Agricultural Credit
CL Tiers	7: STD-0, STD-1, STD-2, SMA, SS, DF, B/L
NPL = Classified	SS + DF + B/L
Unclassified	STD-0 + STD-1 + STD-2 + SMA
Defaulted Loan (Law)	Past Due ≥ 6 months (Bank Company Act, Sec. 5GaGa)
Past Due starts for Continuous/Demand	Next day after Expiry Date
Past Due starts for Fixed Term	Next day after installment due date (changed — no 6-month grace)
SS but NOT Defaulted	Past Due 3 months to 5 months 29 days (Continuous/Demand/FTL)
SMA Provision	5% (new — was no separate provision under old circular)
SS Provision	20% of base
DF Provision	50% of base
B/L Provision	100% of base
Minimum base for provision	Greater of: (outstanding − IS − collateral) OR 15% of outstanding
Interest (SS & DF)	→ Interest Suspense Account
Interest (B/L)	Charging ceases
Classification frequency	Quarterly
CL-1 submission deadline	15th of month after quarter-end
IFRS 9 / ECL target	Bangladesh Bank plans full IFRS 9 ECL methodology by 2027
Bangladesh NPL (Sep 2025)	Tk 6.44 lakh crore = 35.73% of total loans (highest in 25 years)

🧠 Mnemonic to Remember the 7 CL Tiers: "S1 S2 SMA — SS DF BL"

Small problem? → STD-0 (Clean)

Slight slip (1 day–1 month) → STD-1

Same slip (1–2 months) → STD-2

Mind the warning (2–3 months) → SMA — 5% provision kicks in here!

━━━━━━━━━━━━ NPL Zone ━━━━━━━━━━━━

Seriously behind (3–6 months) → SS — 20%

Doubtful recovery (6–12 months) → DF — 50% + Defaulted!

Bad, write it off (12+ months) → B/L — 100%

📌 Remember: Defaulted = Past Due ≥ 6 months (Bank Company Act). SS (3-6 months) is Classified but NOT Defaulted!

References: BRPD Circular No. 15/2024 (27 November 2024) — Bangladesh Bank; Bank Company Act, 1991 (Sec. 5GaGa, 27KaKa); BRPD Circular No. 06/2023 (Off-Balance Sheet); Bangladesh Bank Quarterly Reports (2024–2025); ADB Asia-Pacific Financial Indicators Report. | Last updated: March 2026.

Banking and Financial Terms

Crowding out refers to the times when "increased public sector spending replaces, or drives down, private sector spending." ... Crowding in, on the other hand, is defined as when governmental deficits' spur investment in private sector.

Alpha Testing'

Definition: Alpha testing is a type of testing that is done on an application towards the end of a development process when the product is almost in a usable state. 

Financial Health report & Financial Indicator

In accordance with the Bangladesh Bank Guidelines of “Managing Core Risk in Banks on Internal Control and Compliance Risk”, Internal Control and Compliance Wing is required to prepare annual health report of the bank. The report comprises 03 (three) segmental health named as:

Foreign Currency Loan for Bangladeshi Entrepreneurs

Bangladesh Entrepreneurs seek foreign currency loan, in that case, he has searching Possible Lender.

Lenders will appraise loan application based on SWOT S analysis of Applicant , considering  Rate of Return. Upon Final Agreement, fund will be placed and later repayment will be done as per agreement.

Why we seek FC loan

 Bangladeshi borrowers prefers foreign loan for various reasons including lower interest rate and availability of large amount from a single lender.

Special drawing rights (SDR)

Special drawing rights (SDR) is the the currency of the IMF. SDRs(Special Drawing Rights) refer to the foreign exchange reserve assets and are maintained by the IMF. Hence this is like a global currency maintained by the IMF.Countries are loaned money by the IMF not in dollars or Euro etc, but in SDR's. The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves. So far SDR 204.2 billion (equivalent to about US$291 billion) have been allocated to members, including SDR 182.6 billion allocated in 2009 in the wake of the global financial crisis. The value of the SDR is based on a basket of five currencies—the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.

To put it more simply, it is a type of collateral that commercial banks keep when providing you a loan. The collateral is for the security of the banks in case the borrower can't repay the loan.

IMF acts as central bank of the central banks. Roles of central banks are:

Trade Based Money Laundering (TBML)

The TBML paper published by the Financial Action Task Force (FATF) has a list of red flag indicators that can be used by bank to combat TBML.

These red flags include the following:

1	Significant discrepancies between the description of the commodity on a bill of lading and the invoice
2	Significant discrepancies between the value of the commodity or goods reported on the invoice and the fair market value. For example, gold jewelry being exported at US$500 an ounce when the market rate is approximately US$950 per ounce.
3	The type of commodity being shipped is not in line with the exporter or importer’s regular business activities, e.g., a manufacturer of toys exporting IT equipment. Cross linking “know your client” data and regular business alerts is an absolute requirement for an effective AML compliance program.
4	The size of shipment appears inconsistent with the scale of the exporter or importer’s regular business activities. For example, a small textile exporter shipping a consignment worth US$50 million when its normal turnover is $1.5million.
5	The goods are shipped through one or more jurisdictions or unconnected subsidiaries for no apparent economic reason.
6	The transaction involves the receipt of cash (or other payments) from third party entities that have no apparent connection with the transaction. The transaction involves the use of front or shell companies.

Student file

Q. What documents are required to open student file?

 (i) Application (Appendix 5/64) duly filled in;
(ii) Original and photocopy of admission letter issued by the educational institution in favour of the student (such as the I-20 in the case of US institutions);
(iii) Original and photocopy of estimate relating to annual tuition fee, board and lodging, incidental expenses etc. issued by the concerned educational institution (I-20 in case of US institutions);
(iv) Attested copies of educational certificates of the applicant; and
(v) Valid Passport.

Large loan, CIB Report, International Credit Card

Large loan

Large loan/investment refers to any exposure by a bank to a single person/counterparty or a group which is equal to or greater than 10% of the capital of the bank.

Say, a bank has capital amounting to Tk. 2000 crore. If the bank extends loan/investment (funded or non-funded or both) equal to Tk. 200 crore (10% of capital) or above to any single person/counterparty or a group, it will be considered as a large loan/investment.

Basel III: An Overview

Basel III refers to the capital and liquidity standards prescribed by the Bank for International Settlements (BIS) to promote stability of international banking system. BIS is an international financial institution, which acts as a bank of central banks

Capital and liquidity standards prescribe minimum level of capital and liquidity that banks should maintain.

Risk management instruments by banks

NPI CRAR HHI CRR IDR SLR NSFR LCR   ROA

Investment Growth ROE NIM MTFR Gap and Duration MCO Recovery Rate Internal & External Fraud VAR

STR CTR  RWA OBSE Net Open Position Liquid Asset (LA)  to TD LA to STL Borrowed Fund to TA

Leverage Ratio Overdue Accepted Bill Un-reconciled Suspense Negative Media Report Equity Price Risk Wholesale Borrowing

Objective Questions with answer for exam

Mercantile Bank PLC – Objective Questions & Answers
Bank Exam Preparation (Updated March 2026)

Compiled by: Credit Analysis Division, Mercantile Bank PLC  |  Last Updated: March 2026  |  All figures staff-verified

Section A: Mercantile Bank PLC — Key Facts

Q2 MBL-Specific

What is the contact centre number of Mercantile Bank PLC?

16225
Overseas / T&T: +88 09678016225
Email: contact@mblbd.com

Q2a MBL-Specific

When was Mercantile Bank PLC incorporated and when did it commence operations?

Incorporated: 20 May 1999 under the Bank Companies Act, 1991. Operations commenced: 02 June 1999.

Q2b MBL-Specific

When was the name changed from Mercantile Bank Limited to Mercantile Bank PLC?

27 August 2023

Q2c MBL-Specific

Where is the Head Office of Mercantile Bank PLC?

61, Dilkusha Commercial Area, Dhaka-1000
Phone: +88-02-223382295  |  SWIFT: MBLBBDDH  |  Website: www.mblbd.com

Q2d MBL-Specific

What is the current network footprint of Mercantile Bank PLC?

Network Type	Count (Staff-Verified, March 2026)
Branches	153
Sub-Branches (Uposhakha)	48
Islamic Banking Windows	45
Offshore Banking Units (OBU)	2
Agent Banking Outlets	188+
ATMs	197+

Note: The official website mblbd.com is not yet updated to reflect the latest branch and sub-branch count.

Q2e MBL-Specific

What are the subsidiaries of Mercantile Bank PLC?

1. Mercantile Bank Securities Limited (MBSL) — formed 27 June 2010, commenced 14 September 2011
2. Mercantile Exchange House (UK) Limited — incorporated 01 December 2010, commenced 06 December 2011
3. MBL Asset Management Limited (MBLAML)

Q2f MBL-Specific

On which stock exchanges are Mercantile Bank PLC shares listed?

Dhaka Stock Exchange (DSE) — listed 16 February 2004  |  Ticker: MERCANBANK
Chittagong Stock Exchange (CSE) — listed 26 February 2004

Q2g MBL-Specific

What Islamic banking brand does Mercantile Bank operate?

MBL-Taqwa — the Islamic Banking Window of Mercantile Bank PLC, operating under BRPD Circular No. 15 dated 09.11.2009.

Q2h MBL-Specific

What digital banking channels does Mercantile Bank PLC offer?

i-Banking (internet banking), MBL Rainbow (mobile app), MBL CorporatePay, MBL e-KYC, SMS Alert Service, VISA Dual Prepaid Card, VISA Dual Hajj Card, Credit Card, Debit Card, VISA Medical Card, VISA International Student Card.

Section B: General Banking — Updated Facts & Figures

Q3 Regulatory

What is the Bangladesh Bank complaint number?

16236

Q5 General

When was the Islamic Development Bank (IDB) established?

1975

Q6 General

A cheque placed after six months of its issue date is called?

Stale Cheque

Q7 Islamic Finance

Agreed upon profit is a must for which Islamic financing mode?

Bai-Murabaha

Q8 General

When did Bangladesh sign the charter of the Islamic Development Bank (IDB)?

1974

Q9 Regulatory

When a payee or endorser does not specify an endorsee, it is called?

Blank Endorsement

Q10 Islamic Finance

Islamic Economics and Finance is derived from?

Al-Muamalat

Q11 Islamic Finance

Ijma means?

Agreement of Khulafa-e-Rashidin (the Rightly Guided Caliphs)

Q12 Regulatory

As per the NI Act 1881, the relationship between banker and customer is?

Bailor-Bailee, Principal-Agent, Mortgagor-Mortgagee

Q13 Islamic Finance

What is Wakalah (Power of Attorney)?

A contract where a person appoints a representative to undertake transactions on their behalf — similar to a power of attorney. A contract of buying and selling of services in exchange for commission is called Wakala.

Q14a Islamic Finance

Juala is like?

Tender. A Juala is an agreement where a person promises a specified reward if a job is done. The one making the declaration is called Ja'il; the one who does the job is called Amil.

Q14b Islamic Finance

Kifalah is?

Guarantee / Surety. A third party becomes legally surety for the payment of a debt of another.

Q15 Islamic Finance

Bai Al-Inah means?

Buy-back arrangement (sale and repurchase)

Q16 Regulatory

After financing a limited company, within how many days must 1st charge with RJSC be created?

21 days

Q18 Islamic Finance

Post-shipment finance in Islamic banking is called?

MDB — Musharaka Documentary Bills (Inland)

Q19 Regulatory

What are the current Investment to Deposit Ratio (IDR) / Credit Deposit Ratio (CDR) limits?

Bank Type	IDR/CDR Limit
Islamic Banks	92%
Conventional Banks	87%

As per DOS Circular No. 5 dated 17 September 2019 (COVID modification effective 15 April 2020).

Q31 General

A Bill of Exchange is issued by?

The Exporter

Q32 Regulatory

A bank account is opened under?

The Contract Act, 1872

Q33 Regulatory

What replaced IRG, and what does it stand for?

Internal Credit Risk Rating (ICRR) — as per Bangladesh Bank's Guidelines on Internal Credit Risk Rating System for Banks.

ICRR Rating	Aggregate Score
Excellent	≥ 80%
Good	≥ 70% to < 80%
Marginal	≥ 60% to < 70%
Unacceptable	< 60%

Q36 Regulatory

What risk weight is applied to a client with the worst performance under Basel III?

150%

Q40 Regulatory

Statutory Liquidity Ratio (SLR) is determined based on?

Total Time and Demand Liabilities. Rate: 13% for conventional banks; 5.5% for Islamic banks.

Q45 Regulatory

How many risk weight parameters are there under Basel III?

7 parameters: 0%, 20%, 50%, 75%, 100%, 125%, 150%

Q47 Regulatory

When did Bangladesh Bank circulate guidelines for Islamic banks?

2009 — BRPD Circular No. 15 dated 09.11.2009

Q48 General

When an L/C authorises a bank to provide pre-shipment finance, it is called?

Red Clause Letter of Credit (L/C)

Q49 Regulatory

Under the Artha Rin Adalat (Money Loan Court) Ain 2003, an execution suit must be filed within?

180 days. Section 12 empowers banks to sell mortgaged property without filing suit in court.

Q50 Regulatory

When was the Bank Company Act enacted?

1991 (amended in 2013)

Q51 General

Where is the headquarters of the Islamic Financial Services Board (IFSB)?

Kuala Lumpur, Malaysia. IFSB started operations in 2003.

Q54 Islamic Finance

In Musharaka, how is loss borne and profit distributed?

Loss is borne as per equity contribution. Profit is distributed as per agreement.

Q55 Islamic Finance

In Mudaraba, how is profit taken?

As per the agreed percentage between Rab-ul-Maal (investor) and Mudarib (entrepreneur).

Q57 Islamic Finance

Who was the founder of the first Islamic bank in 1963?

Dr. Ahmed Al-Naggar (Mit Ghamr Savings Bank, Egypt)

Q58 General

How many days are there in the Islamic (Hijri) calendar?

354 days

Q70 Islamic Finance

When and where was the AAOIFI registered?

27 March 1991, in the State of Bahrain. AAOIFI = Accounting and Auditing Organization for Islamic Financial Institutions.

Q71 Islamic Finance

When did the Islamic Financial Services Board (IFSB) start operations?

2003, based in Kuala Lumpur, Malaysia.

Q82 General

SWIFT stands for?

Society for Worldwide Interbank Financial Telecommunication

Q83 Regulatory

When was the Bangladesh Bank Order executed?

1972

Q85 Regulatory

Treasury Bills are sold by? What are the maturities?

Bangladesh Bank. Treasury Bills — 6 maturities: 7-day, 14-day, 30-day, 91-day, 182-day, 364-day. Bangladesh Government Treasury Bonds (BGTBs) — 5 maturities: 2, 5, 10, 15, 20 years. Minimum trade: BDT 1.00 lac or multiples.

Q87 Regulatory

ECAI stands for?

External Credit Assessment Institution. Total 8 in Bangladesh. Foreign ECAIs: Moody's, S&P (Standard & Poor's), Fitch.

Q88 Regulatory

Under Basel III, risk weight for 'AAA' rated claims is?

20%

Q89 Regulatory

Section 12 of the Artha Rin Adalat Ain 2003 empowers banks to?

Sell mortgaged collateral to realise the bank's dues without filing suit in court.

Q97 General

VaR stands for?

Value at Risk. Measures potential change in profit or asset value under adverse market scenarios. Banks use it to calculate probable loss from changes in deposit and investment rates.

Q98 Islamic Finance

Bai-Istisna relates to?

Industry and Manufacture Finance — financing of manufactured or constructed goods.

Q113 Islamic Finance

How many heads for distribution of Zakat are prescribed in the Quran?

8 heads

Q114 Islamic Finance

Which Quranic verse has made Islam a complete code of life?

Surah Al-Maida (Chapter 5), Verse 3

Q131 Regulatory

When was Basel III implemented?

Parallel run from 2013; full implementation from 2019.

Q132 Islamic Finance

The mode of investment most akin to Maqasid al-Shariah is?

Musharaka

Q142 Regulatory

The Contract Act was introduced in?

1872

Q145 General

Call money refers to?

Short-term inter-bank lending and borrowing

Q148 Regulatory

Rate of provision on off-balance sheet items?

1%

Q149 Regulatory

Risk weight on unrated corporate investment is?

125%

Q150 Regulatory

Stress testing is conducted on?

Quarterly basis

Q151 Regulatory

Capital Adequacy Ratio (CAR) is calculated on?

Quarterly basis

Q152 Regulatory

ICAAP stands for?

Internal Capital Adequacy Assessment Process

Q155 Islamic Finance

Mudaraba Perpetual Bond (MPB) is classified as under Basel III?

Additional Tier 1 (AT-1) Capital

Q157 General

Bank Rate means?

The rate at which the Central Bank (Bangladesh Bank) lends money to commercial banks.

Q158 General

SDR means?

Special Drawing Rights — IMF's international reserve asset.

Q160 General

Liquidity is defined as?

The ability to convert assets into cash quickly without significant loss in value.

Q165 Islamic Finance

When was the Central Shariah Board for Islamic Banks of Bangladesh (CSBIB) established?

2001

Q176 Regulatory

'Guidelines for Islamic Banking' was issued by?

BRPD Circular No. 15 dated 09.11.2009

Q210 Regulatory

A high-value cheque is?

BDT 5 lac and above

Q223 Regulatory

How many risk factors are used for stress testing, and what are they?

5 risk factors:

1. Profit / Interest Rate
2. Forced Sale Value of Collateral
3. Non-Performing Investments / Loans (NPI/NPL)
4. Equity / Share Prices
5. Foreign Exchange Rate

Q230 Regulatory

Holder, Holder in Due Course, and Payment in Due Course are stated in?

Sections 8, 9, and 10 of the NI Act 1881 respectively.

Q239 General

What are the components of M1?

Currency at hand, Chequeable deposits, Deposits of Financial Institutions with Bangladesh Bank, Deposits of NBFIs in Bangladesh Bank.

Q242 General

What is M2 (Broad Money)?

M2 = M1 + Time Deposits with Deposit Money Banks (banks and NBFIs).

Q252 General

Pari Passu charge means?

With equal speed or progress — the equal right of creditors to receive assets from the same source without one taking precedence over another.

Exam-Ready One-Liner: Mercantile Bank PLC — Contact: 16225 | Est: 02 June 1999 | HO: 61 Dilkusha, Dhaka | SWIFT: MBLBBDDH | Branches: 153 | Sub-branches: 48 | Islamic Window: MBL-Taqwa | Updated: March 2026