Regulatory Alerts2024-09-01
On Risk Classification and Provisioning for Credit Institutions
The Banque de la République du Burundi issued Circular No. 12/2018 to establish minimum rules for classifying credit exposures into five risk categories and mandating corresponding provisioning rates ranging from 1% to 100%. The regulation defines precise criteria for performing, surveillance, pre-doubtful, doubtful, and compromised exposures based on payment delays, collateral quality, and counterparty financial health. It further mandates monthly reporting to the Central Bank, specifies deductible collateral requirements, and sets out procedures for rescheduling, write-offs, and IFRS/IAS impairment alignment.
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