Mehedi Hasan/Dhaka TribuneThe NBFIs will be categorised as ‘A’, ‘B’ and ‘C’ instead of ‘green’, ‘yellow’ and ‘red’ to indicate whether their financial health is good, average or badThe Bangladesh Bank yesterday revised its guidelines on stress testing for non-bank financial institutions (NBFIs). As per revised guidelines, NBFIs will be categorised as ‘A’, ‘B’ and ‘C’ instead of ‘green’, ‘yellow’ and ‘red’ to indicate whether the position of the NBFI is good, average or bad based on the institutes’ weighted insolvency ratio (WIR). The central bank assesses stress to understand the consequences of financial institutions if bad loans and other risky assets increase, said a high official of BB. As per the previous method for stress testing, the NBFIs in red zones were viewed in a very negative light even though their financial health is not that bad for practical intents and purposes, he added.

Source: Dhaka Tribune December 21, 2020 18:56 UTC