11.1. Financial Reporting Standards (IFRS Adoption)

The Bangladesh Bank (BB) has outlined a strategic plan to implement the Expected Credit Loss (ECL) methodology, in line with International Financial Reporting Standard (IFRS) 9, by 2027. This transition from a traditional rules-based loan classification system to a forward-looking, risk-based approach aims to improve credit risk assessment by considering past events, current conditions, and future forecasts. The implementation will occur in phases: by June 2026, banks are expected to adopt IFRS 9 on a pilot basis in select branches; by September 2026, this will extend to branches covering at least 25% of total loan portfolios; and by June 2027, to at least 75%. Complete sector-wide alignment with IFRS 9 is anticipated by December 2027. This initiative is expected to enhance financial transparency, strengthen investor confidence, and reshape Bangladesh’s banking landscape.