Latest financial reports for CMSMEs mandatory from 2023

Cottage, micro, small and medium enterprises (CMSMEs) must submit their latest financial reports to banks for lending or loan renewal purposes.

Bangladesh Bank (BB)'s Banking Regulation and Policy Department (BRPD)on Monday issued a circular where it said that the banks have to save these financial reports in the loan file.

The new directive will be effective from January 1, 2023.

The move was also made to increase the flow of credit in it for accelerating economic activities.

Considering the negative impact of the Covid-19 pandemic on the CMSME sector, it was decided that businesses under the CMSME sector will be classified as public interest institutions, as defined under section 2 (8) of the Financial Reporting Act 2015, the circular also read.

Under such definition, public and private entities have to submit an updated financial report while taking out or renewing bank loans that has to be properly stored in the loan file.

Earlier, the central bank had issued a circular stating public and private entities had been submitting financial statements in the name of management audit reports, review reports, etc without giving an updated financial report while taking out or renewing bank loans.

In the interest of maintaining debt discipline and bringing greater transparency in the financial sector, the institutions are required to submit updated statutory audit reports and audited financial reports, audited by chartered accountants and prepared for the stakeholders, the central bank added.