Regulatory Alerts2022-01-13
Regulation on Asset Classification, Provisioning and Its Disbursement
The Bank of Mongolia and the Ministry of Finance jointly issued a revised regulation effective July 1, 2017, establishing minimum requirements for banks to classify loans and other assets using quantitative and qualitative criteria. The document mandates that banks determine final asset classes based on the lowest quality derived from these criteria and establish corresponding loss provisioning, prioritizing regulatory standards over internal bank methodologies when discrepancies arise. It further defines specific asset categories, including multiple, pooled, restructured, and off-balance sheet assets, while outlining strict procedures for monitoring compliance and enforcing asset quality assessments.
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