Bank Solvency Certificate Tender Requirements: PPR Rule 95 Guide

Under PPR Rule 95, bidders on works contracts must submit a bank solvency certificate from a scheduled bank to demonstrate working capital adequacy. The certificate must evidence liquid funds equal to 2–3 months of estimated contract cash flow. This requirement applies to all bidders meeting the financial capacity threshold, regardless of contract size, though very large works may trigger additional disclosure obligations around litigation and defaults.

A bank solvency certificate is a formal attestation from a scheduled bank confirming that a bidder maintains sufficient liquid funds to execute a contract. Under PPR Rule 95, this certificate serves as proof of working capital capacity and is mandatory in the bid envelope for works contracts. The required amount typically equals 2–3 months of estimated cash flow on the contract.

Who Must Submit a Bank Solvency Certificate?

All bidders on works contracts governed by PPR Rule 95 must submit a bank solvency certificate as part of their financial capacity documentation. The certificate must be issued by a scheduled bank operating in Bangladesh. Joint ventures and consortia are also required to submit certificates, though the aggregated working capital of all partners may be considered collectively. Sole proprietors, partnerships, limited companies, and state-owned enterprises all fall within this requirement if they bid on works tenders.

The procuring entity may waive or modify this requirement only in exceptional circumstances and must document such decisions in the tender notice or bid evaluation report.

When Is a Bank Solvency Certificate Required?

A bank solvency certificate must be submitted at the time of bid submission and included in the bid envelope. It is a mandatory financial eligibility document under PPR Rule 95 and cannot be submitted after the bid deadline. The certificate should be dated within a reasonable period before bid opening—typically within 30 days—to ensure it reflects current financial standing. Procuring entities may specify the exact validity period in the tender document.

For very large works contracts, the procuring entity may also request updated certificates or supplementary financial disclosures during bid evaluation to confirm ongoing solvency.

How Much Working Capital Must You Demonstrate?

PPR Rule 95 requires bidders to demonstrate working capital adequacy typically equal to 2–3 months of estimated cash flow on the contract. The exact amount is calculated by the procuring entity based on the contract's estimated value and duration. For a contract valued at 100 lakh taka over 12 months, for example, the required working capital might be 16–25 lakh taka (representing 2–3 months of monthly cash outflow).

The bank solvency certificate must explicitly state the liquid funds available to the bidder and confirm that these funds are unencumbered and available for contract execution. The procuring entity will cross-check this amount against the estimated tender value and contract schedule.

Average Annual Turnover and Financial Capacity

Beyond working capital, PPR Rule 95 also requires bidders to demonstrate average annual turnover over the last 3–5 years at least equal to a specified multiple of the estimated tender value—commonly 0.5 to 1.5 times. This turnover requirement is evidenced by audited financial statements filed in the bid envelope, not by the bank solvency certificate alone.

Together, turnover and working capital form the two pillars of financial capacity assessment. A bidder may have strong historical turnover but insufficient liquid funds, or vice versa; both must meet the procuring entity's thresholds.

Audited Financial Statements and Supporting Documents

The bank solvency certificate must be accompanied by audited financial statements covering the 3–5 year look-back period specified in the tender document. These statements provide the foundation for verifying average turnover and are mandatory in the bid envelope. The certificate itself is a point-in-time snapshot; the audited statements provide historical context.

For very large works, the procuring entity may also require disclosure of any pending litigation, defaulted contracts, or insolvency proceedings. This disclosure protects the procuring entity from awarding contracts to bidders facing financial or legal jeopardy.

How to Obtain and Present a Bank Solvency Certificate

To obtain a bank solvency certificate, contact your scheduled bank and request a formal letter confirming your available liquid funds. The bank will typically require you to provide recent account statements, proof of deposits, and authorization to disclose account information. The certificate must be on the bank's official letterhead, signed by an authorized officer, and include the bank's stamp.

When presenting the certificate in your bid, ensure it is placed in the financial capacity section of the bid envelope, clearly labeled and cross-referenced to PPR Rule 95. Do not submit photocopies unless the tender document explicitly permits them; original or certified copies are standard. Include the certificate alongside your audited financial statements and any other financial eligibility documents required by the tender notice.

FAQ

Q: Can I submit a bank solvency certificate from a private bank, or must it be from a nationalized bank?

A: PPR Rule 95 requires the certificate to be from a scheduled bank. Scheduled banks in Bangladesh include both nationalized and private banks recognized by the Bangladesh Bank. Check the tender document for any specific bank restrictions, though the rule itself does not limit you to nationalized institutions.

Q: What if my company has sufficient funds but they are held overseas or in foreign currency?

A: The bank solvency certificate must evidence liquid funds available in Bangladesh, typically in Bangladesh Taka. Funds held overseas or in foreign currency may not be counted toward working capital adequacy unless the tender document explicitly permits conversion and transfer. Consult your bank and the procuring entity before submitting.

Q: If I am bidding as part of a joint venture, do all partners need separate bank solvency certificates?

A: PPR Rule 95 permits the aggregated working capital of all joint venture partners to be considered collectively. You may submit individual certificates from each partner's bank, or a single consolidated certificate if your lead partner's bank can confirm the combined liquid position. The tender document will specify the required format.

Q: How recent must a bank solvency certificate be at the time of bid submission?

A: The certificate should typically be dated within 30 days before bid opening to ensure it reflects current financial standing. The tender notice may specify a different validity period. A certificate older than 30 days may be rejected as stale or outdated, so plan accordingly.

Q: What happens if my bank solvency certificate shows insufficient working capital?

A: Your bid will be evaluated as financially ineligible under PPR Rule 95 and may be rejected during the financial capacity assessment stage. You cannot remedy this deficiency after bid submission. Ensure your certificate reflects adequate liquid funds before submitting your bid.

Conclusion

Bank solvency certificates are a cornerstone of financial capacity assessment under PPR Rule 95 for works contracts in Bangladesh. Submitting an accurate, timely certificate from a scheduled bank—supported by audited financial statements—is essential to bid eligibility and evaluation success. Use TenderPulse to analyse tender requirements, verify financial thresholds, and prepare compliant bid documentation before submission.