B Mirror Report: Bangladesh Bank has issued comprehensive implementation guidance for IFRS 9 ‘Financial Instruments’, taking a significant step toward aligning the country’s banking sector with international financial reporting standards.

The central bank issued a circular in this regard today, outlining a roadmap and preparatory instructions for banks to implement the IFRS 9 framework by 2027. According to the circular, the roadmap has been divided into three phases, and the latest guidance has been provided at the beginning of the second phase to assist banks in preparing for the transition.

In line with the roadmap, Bangladesh Bank has prepared a document titled “Guidance for Banks in Implementing IFRS 9 Financial Instruments” and formally issued it for banks’ compliance. The guidance aims to help banks take the necessary steps to meet the financial reporting requirements stipulated under IFRS 9.

Under Section 38 of the Bank Company Act, 1991, banks are classified as Public Interest Entities (PIEs) as defined by the Financial Reporting Council. As such, banks are required to follow financial reporting standards in accordance with the Financial Reporting Act, 2015.

Furthermore, according to a gazette issued by the Financial Reporting Council on November 2, 2020, all PIEs must comply with the Conceptual Framework for Financial Reporting and the International Financial Reporting Standards (IFRS) under Section 44 of the Financial Reporting Act, 2015.

The guidance issued by Bangladesh Bank primarily focuses on the key and critical areas of IFRS 9 implementation. However, it does not cover all aspects of the accounting standard and should be considered the minimum requirements for banks in implementing IFRS 9.

The circular also refers to the Guidance on Credit Risk and Accounting for Expected Credit Losses issued by the Basel Committee on Banking Supervision in December 2015, recommending banks adopt the principles outlined in that document.

According to the directive, the implementation guidance will apply to funded and non-funded credit facilities by January 2028, while its application to other financial instruments under IFRS 9, such as investment securities, will be required by January 2029.

Bangladesh Bank also stated that it will issue additional directives—such as those related to CIB reporting and reporting templates—from time to time as necessary. The central bank will also provide further guidance and clarification to banks during the implementation process. Banks have been instructed to correspond with Bangladesh Bank through a dedicated official email regarding IFRS 9 implementation matters.

The directive has been issued by Bangladesh Bank under the authority granted by Section 49(1)(cha) of the Bank Company Act, 1991.