Dhaka, March 9 -- Provisioning rules for banks are getting toughened under a new model that requires bankers to estimate potential credit losses in advance to help determine proper provisions.

Bangladesh Bank (BB) is set to introduce the IFRS 9-based Expected Credit Loss (ECL) provisioning framework avowedly as part of efforts to modernise the country's banking sector and align it with international financial reporting standards (IFRS).

According to the implementation guidance issued Sunday by the central bank, the new framework will come into effect both for funded and non-funded credit facilities from January 1, 2028 for all scheduled banks in Bangladesh.

The rules will later apply to other financial instruments from January 1, 2029....