ICRRS: Internal Credit Risk Rating System

ICRRS( Internal Credit Risk Rating System):

Internal Credit Risk Rating System refers to the system to analyze a borrower's
repayment ability based on information about a customer's financial condition including its
liquidity, cash flow, profitability, debt profile, market indicators, industry and operational
background, management capabilities, and other indicators.

The key uses of this guideline:
a) To provide a granular, objective, transparent, consistent framework for the
measurement and assessment of borrowers’ credit risk.
b) To facilitate portfolio management activities.
c) To assess the quality of individual borrower to help the banks to determine the quality
of the credit portfolio, line of business of the branch or the Bank as a whole.
d) To be used for individual credit selection, credit pricing, and setting credit limits and
terms & conditions.

Rating Scores Aggregate:
Excellent ≥80%
Good ≥70% to <80%
Marginal ≥60% to <70%
Unacceptable <60%


List of Eligible Collateral (as per BRPD circular no 14/2012 on Loan
Classification and Provisioning):
100% of deposit under lien against the loan.
100% of the value of government bond/savings certificate under lien.
100% of the value of guarantee given by the Government or Bangladesh Bank
100% of the market value of gold or gold ornaments pledged with the bank.
50% of the market value of easily marketable commodities kept under control of the
bank.
Maximum 50% of the market value of land and building mortgaged with the bank.
50% of the average market value for the last 06 months or 50% of the face value, whichever
is less, of the shares traded in a stock exchange.


Ref:  GUIDELINES ON INTERNAL CREDIT RISK RATING SYSTEM FOR BANKS