Regulatory Alerts2014-12-11
Prudential Regulations for Asset Classification, Loan Loss Provisions, and Interest Suspension on Non-Performing Loans
The Central Bank of Liberia issued Regulation No. CBL/RSD/004/2014 to require licensed banks implement a standardized five-tier asset classification system and rigorous credit risk management protocols. The regulation mandates specific loan loss provisions ranging from five percent for specially mentioned loans to one hundred percent for loss assets, supplemented by a baseline general provision of one percent. It further compels banks to suspend interest accrual on non-performing loans until actual repayment, enforce strict write-off timelines within two years, and apply daily computerized monitoring for microfinance portfolios.
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