1. Purpose of the Guideline
This guideline aims to establish a standardized process for assessing earthquake-related structural risks during the evaluation and approval of mortgage-backed loans. Bangladesh lies in a seismically active zone; therefore, prudent risk management requires verification of building safety, structural compliance, and disaster resilience before approving any mortgage loan.
2. Scope
This policy applies to:
All home loans, home equity loans, and property-backed facilities. Both individual and corporate borrowers. New, under-construction, and existing building.
3. Key Responsibilities
3.1 Bank’s Responsibility:
The bank must ensure:
1. The mortgaged property is structurally safe and not vulnerable to severe earthquake risk.
2. All relevant documents related to structural integrity and building safety have been verified.
3. Risks are identified, documented, and considered in the credit decision.
4. Borrowers are made aware of safety obligations and insurance requirements.
3.2 Employee / Officer Responsibility
1. Credit officers, appraisers, and relationship managers must:
2. Collect and verify mandatory documents
3. Conduct detailed site inspection
4. Report visible structural risks
4. Escalate high-risk cases to Credit Risk Management (CR
4. Mandatory Document Requirements
For all mortgage applications, the following earthquake-related compliance documents must be collected (as applicable):
4.1 Structural & Construction Documents
RAJUK/CDA/KDA/Other authority approved plan
BNBC-compliant structural design approval
Soil test report and foundation design
Completion certificate (for finished buildings)
Fire & safety clearance (if applicable)
4.2 Special Certificates (for buildings over 20 years or suspicious construction)
Structural integrity certificate from IEB-certified engineer
Earthquake resistance assessment report
Retrofitting recommendation (if required)
5. Site Inspection Procedure
5.1 Physical Inspection
Appraiser/Bank officer must evaluate:
Cracks in beams, columns, slabs
Water seepage damaging structural members
Uneven settlement or tilting signs
Weak ground-floor or “soft-story” conditions
Illegal vertical extensions
Quality of materials used in construction
5.2 Photographic Evidence
Photographs must be attached with:
Front elevation
Structural elements
Surrounding environment
5.3 Age-Based Risk Guidelines
0–15 years: Normal processing
15–25 years: Structural observation mandatory
25+ years: Structural integrity certificate required
6. Earthquake Risk Rating
CRM must assign risk based on building condition:
Risk Level
Characteristics: BNBC-compliant, verified design
Action: Approve normally
Medium Minor cracks, older building, limited deviation Approve with caution & insurance
High Visible structural damage, illegal floors, no documents Decline / request structural audit
Severe Major cracks, weak foundation, unsafe for occupancy Reject immediately
7. Insurance Guidelines
Earthquake coverage in Fire & Allied Perils Insurance is recommended for all mortgage properties.
For medium- and high-risk cases, insurance becomes mandatory.
Sum insured should reflect reconstruction cost, not market valuem
8. Borrower Awareness
Bank must advise borrowers to:
Avoid unauthorized extensions
Ensure periodic structural maintenance
Take earthquake insurance for safety
Follow BNBC guidelines for any renovati
9. Compliance & Audit
Internal Audit & Inspection teams must check whether earthquake-risk guidelines were followed.
Any deviation must be justified in the credit file.
Non-compliance may result in review, rectification order, or disciplinary action.
10. Exceptions
Exceptions may be granted only by Managing Director, DMD, or Head of CRM depending on institution policy.
All exceptions must include written justification and risk mitigation plan.
11. Effective Date & Review
This guideline becomes effective immediately and will be reviewed every two (02) years or earlier if BNBC or regulatory changes require updates.
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