Regulatory Alerts2019-07-10
09-1 Restructuring of Loans Granted to the Hotel Sector and the Establishment of Related Specific Provisions
Issued by the Central Bank of Haiti (BRH), this circular authorizes commercial banks to mutually restructure viable hotel sector loans by adjusting interest rates and amortization schedules. It mandates a 5% specific provision for restructured loans, exempts the associated gourde and dollar funding from mandatory reserve requirements, and requires quarterly detailed reporting to the central bank. The directive replaces the March 2015 circular and takes effect on June 15, 2016, aiming to stabilize the banking system and support tourism-driven economic recovery amid low hotel occupancy and sluggish growth.
CIRCULAR LETTER No. 09-1 CIRCULAR LETTER TO BANKS In accordance with Article 83 of the Law of May 14, 2012, concerning 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 the resources used in the context of these loans.
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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 revitalizing tourism and the economy in general; and v. the exposure of the banking system to the hotel sector; Banks are hereby authorized to:
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proceed, by mutual agreement with their client, to redefine the terms of any loan granted to a viable hotel institution (both in terms of interest rate and capital amortization). Loans thus restructured shall be subject to a specific provision of 5% and shall be treated and reported separately in accordance with the provisions or requirements of Section 8 of Circular 87.
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refrain from establishing mandatory reserves on both gourde and dollar resources used to grant loans to a hotel institution.
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Reporting Banks must submit to the BRH 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 regarding Circular 83-4 on credit risk concentration.
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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 Outstanding Loans 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: _______________ _________________