Regulatory Alerts2025-01-28
Circular No. 2023-01 - Minimum Coverage of Banks' Non-Performing Credit Exposures
The Central Bank of the Republic of San Marino issued Circular No. 2023-01 to establish supervisory expectations for banks to achieve 100% coverage of non-performing exposures (NPEs) through a multi-year convergence path. The regulation mandates minimum initial coverage levels ranging from 40% to 70% based on the bank's NPE ratio and asset type, requiring an annual coverage increase of at least 10% until full coverage is reached by 2028-2030. Banks must apply these prudential or accounting coverage requirements to existing and future NPEs granted before January 1, 2024, with specific timelines for secured and unsecured exposures.
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