Regulatory Alerts2021-01-11
Circular to Banks and Financial Institutions No. 2021-01 of January 11, 2021
The Governor of the Central Bank of Tunisia has issued Circular No. 2021-01 to repeal and replace Article 10 bis, mandating that banks and financial institutions establish collective provisions against latent risks on current (Class 0) and specially monitored (Class 1) commitments. The circular requires institutions to apply a detailed calculation methodology that groups commitments by sector and customer segment, determines historical average migration rates, applies sector-specific upward adjustments, and derives final provisioning rates from rolling five-year series. Additionally, the regulation mandates annual reviews by statutory auditors, requires prior discussion with the Central Bank for any provision reversals, and allows financial institutions to apply lower rates upon prior approval supported by a reasoned report.