Regulatory Alerts2024-03-04 | CBE4.5CBE Regulation Book 4.5 - Foundations Of Assessing Customers Creditworthiness 5
The Central Bank of Egypt's board of directors approved the rules for assessing the creditworthiness of customers and forming provisions at its meeting on May 24, 2005. The rules were published in the Central Bank's 1991 manual. The Central Bank of Egypt's board of directors emphasized the need for banks to review their policies on creditworthiness assessment and provision formation, as well as when forming provisions for creditworthiness when granting loans. The rules cover the management of credit risk and the principles of creditworthiness assessment and provision formation for all types of customers, including individuals, companies, and medium-sized, large, and very large enterprises, as well as real estate loans, personal loans, and loans for the purchase of consumer goods. The rules on provision formation are based on the Central Bank's instructions to banks, which took effect on September 1, 2005. The Central Bank of Egypt's board of directors emphasized the need for banks to adhere to these instructions and inform the Central Bank of Egypt of any changes to their policies on creditworthiness assessment and provision formation within three months of the end of the fiscal year.