Regulatory Alerts2018-11-01
DBFIA Practice Direction No. 3: Loan Loss Provisions and Reserves
The Central Bank of Belize issued this Practice Direction to prescribe procedures for licensed banks and financial institutions to establish and maintain loan loss provisions and reserves. It mandates specific provision rates of 20%, 50%, or 100% for substandard, doubtful, and loss assets respectively, alongside a 1% general reserve for non-adversely classified loans. The regulation further requires quarterly evaluations, defines strict timelines for writing off uncollectible loans, and stipulates that write-offs must be charged against specific provisions.
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