Regulatory Alerts2020-07-27
DBFIA Practice Direction No. 3 Amendment (27 Jul 2020)
The Central Bank of Belize issued this amendment to DBFIA Practice Direction No. 3 to clearly distinguish between expected credit loss provisioning for financial reporting under IFRS 9 and regulatory provisioning for capital adequacy. The directive mandates specific calculation methods for regulatory loan loss provisions, requiring 20%, 50%, or 100% provisions for substandard, doubtful, and loss assets respectively, alongside a 1% general provision for non-adversely classified loans. It further establishes strict timelines for writing off unsecured and secured non-performing loans and defines the Loan Loss Reserve as an equity account funded by retained earnings to cover regulatory provisions exceeding IFRS requirements.
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