Regulatory Alerts2019-07-10
Circular Letter – Restructuring of Hotel Loans
The Bank of Haiti issued Circular Letter No. 09-1 on June 7, 2016, authorizing banks to restructure viable hotel loans with specific provisions and exemption from reserve requirements. This measure aims to support the hotel sector and broader economy amid stagnation and low occupancy rates during the 2015-2016 fiscal year. Banks are required to submit detailed quarterly reports to the central bank and maintain distinct accounting for these restructured assets.
CIRCULAR LETTER No. 09-1
CIRCULAR LETTER TO BANKS
Pursuant to Article 83 of the Law of May 14, 2012, on banks and other financial institutions, banks must comply with the provisions of this circular letter regarding: a. the restructuring of loans granted to the hotel sector; b. the establishment of specific provisions related thereto; and c. the non-establishment of mandatory reserves on resources used in the context of these loans.
- General Provisions
Due to: i. the stagnation of the general economic situation and the prospects of low growth for the fiscal year 2015-2016; ii. the low occupancy rate of hotels in the country; iii. the negative impact of economic difficulties on the financial situation of hotels; iv. the importance of the hotel sector for the revival of tourism and the economy in general; and v. the exposure of the banking system to the hotel sector;
Banks are hereby authorized:
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to proceed, by mutual agreement with their client, to the redefinition of the terms of any loan granted to a viable hotel institution (both in terms of interest rate and capital amortization). Restructured loans will be subject to a specific provision of 5% and will be treated and reported separately according to the provisions prescribed in Section 8 of Circular 87.
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not to establish mandatory reserves on both gourdes and dollars resources used to grant loans to a hotel institution.
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Reports
Banks must submit to the BRH (Bank of the Republic of Haiti) at the end of each quarter, namely March 31, June 30, September 30, and December 31, a detailed report on the list of loans to the hotel sector and on the list of loans covered by the program.
The reporting templates attached to this circular letter must be annexed to the compliance reports related to Circular 83-4 on the concentration of credit risks.
- Entry into Force
This circular letter replaces that of March 27, 2015 (# 09) and enters into force as of June 15, 2016.
Port-au-Prince, June 7, 2016
Jean Baden Dubois Governor
Annexes: Annex 1. Loans to the hotel sector Annex 2. Loans covered by the hotel sector program
ANNEX 1 No. Clients Amount Disbursed Date of Loan Approval Interest Rate Loan Term Credit Outstanding Banking Institution
Loans to the hotel sector as of ....... 201...
- Loans to the hotel sector before March 2015
- Loans to the hotel sector after March 2015
- Total loans to the hotel sector
Signature of two authorized executives: ______________ _________________ Position/Title: _______________ _________________
ANNEX 2. No. Clients Amount Disbursed Date of Loan Approval Interest Rate Loan Term Loan Outstanding Banking Institution
Loans covered by the program (hotel sector) as of ....... 201... Total loans covered by the program
Signature of two authorized executives: ______________ _________________ Position/Title: _______________ _________________