Regulatory Alerts2017-07-06
Asset Classification and Provisioning Regulations
The Central Bank of Myanmar issued these regulations to standardize how all banks classify loans, advances, and other assets into five risk categories based on days past due. Banks must calculate specific provisions ranging from zero to one hundred percent against security shortfalls, maintain a general loan loss reserve of up to two percent, and apply strict rules for interest suspension, overdraft clearance, and collateral valuation. The framework takes effect six months after publication, allowing a three-year staggered transition for provisioning adjustments while repealing prior banking instructions and mandating compliance through corrective sanctions.
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