Bangladesh Bank has tightened supervisory controls, ordering scheduled banks to submit interim audit reports on time in a bid to detect loan stress and emerging risks earlier, as concerns over non-performing loans (NPLs) continue to weigh on the sector.
In a circular issued on Thursday, the central bank’s Banking Regulation and Policy Department-2 directed banks to prepare a ninth-month interim audit report for each financial year and submit it by the year-end. The requirement will apply to 2025 and all subsequent reporting periods.
The directive stems from the updated “Bank Company External Audit Regulations, 2024,” which mandates structured interim disclosures to strengthen oversight and improve the timeliness of risk detection.
Officials said the move is part of a broader shift to align supervision with international standards. Bangladesh Bank has already introduced a risk-based supervision (RBS) framework, replacing a uniform monitoring approach with targeted scrutiny based on each bank’s risk profile.
Under the new system, banks with higher vulnerabilities will face closer oversight, allowing regulators to identify financial weaknesses and irregularities at an earlier stage.
The enhanced reporting regime is expected to improve monitoring of banks’ financial health, particularly credit risk and the trajectory of NPLs.
If implemented effectively, officials say, the framework could help contain bad loans while strengthening transparency and accountability across the banking sector.
