The Bangladesh Bank (BB) has provided licence to a new credit rating agency to assess the financial health of bank companies operating in the country.

The newly licensed Alpha Credit Rating Limited (ACRL) would start functioning soon by maintaining the International Convergence of Capital Measurement and Capital Standards (June 2006) under Basel II, a BB circular reads.

With the ACRL, the number of External Credit Assessment Institutions (ECAIs) rose to six in the country. Others are-- CRISL, CRAB, NCRL, ECRL and ACRSL.

ECAIs usually scan a bank’s financial status by analysing risks and capital allocation against credit risk, market risk and operational risk.

These risks covers liquidity risk, residual risk, interest risk in the banking book, legal risk, strategic risk, reputation risk and any other risk associated with the business activities of a bank.

From now on, the central bank would map the rating scales on banks by all six ECAIs with its own rating grades to measure financial health of banking companies.

The Daily Sun/Bangladesh/ 5th Aug 2012