Regulatory Alerts1996-01-01
Classification and Provisioning of Loans Regulations
The Bank of Zambia issued the Classification and Provisioning of Loans Regulations to mandate commercial banks and financial institutions to establish formal frameworks for loan classification and provisioning. The regulations, signed into law on 30 August 1996, are scheduled to take effect on 1 January 1997 to provide institutions adequate time to draft and secure Board approval for their required loan policies and review systems. Institutions must ensure these governing documents are fully operational by the effective date to provide clear directives for all loan department personnel.
[LOGO: BANK OF ZAMBIA]
BANK OF ZAMBIA P.O. Box 30080 Lusaka 10101
Tel. 228888/228903-20
9 October 1996
C B Circular No. 13/96
To: All Commercial Banks and Other Financial Institutions
Dear Sirs
CLASSIFICATION AND PROVISIONING OF LOANS REGULATIONS
The above instrument was signed into law on 30th August 1996 and becomes effective on 1st January 1997.
The implementation of these regulations has been delayed to 1st January 1997 to give all banks and financial institutions sufficient time to draft and have their Boards of Directors adopt their loan policies and loan review system as required by the regulations.
This means that banks should not start working on the two documents on 1st January 1997 but rather these documents should be in place by that date. This will ensure that your officers in the loans area have a clear direction of your bank's policies and of its review system.
Yours faithfully
[SIGNATURE]
S MUSOKOTWANE (DR) ACTING DEPUTY GOVERNOR