Regulatory Alerts2023-02-24
Circular to Banks and Financial Institutions No. 2023-02 of February 24, 2023
The Central Bank of Tunisia issued Circular No. 2023-02 to mandate that banks and financial institutions establish collective provisions against latent risks on current (Class 0) and specially monitored (Class 1) commitments, calculated using a standardized methodology based on historical migration rates, sector-specific mark-ups, and standard provisioning percentages. The circular requires annual reviews of these provisions at the financial year-end, mandates statutory auditors to validate their adequacy, and supersedes previous related provisions effective for the 2022 financial year onward. Financial institutions may apply lower adjustment or provisioning rates upon obtaining prior regulatory approval supported by a reasoned report, ensuring risk-sensitive capital allocation while maintaining prudential stability.