Regulatory Alerts2024-06-12
SBB/90/2024 Asset Classification and Provisioning
The National Bank of Ethiopia issued Directive No. SBB/90/2024 to mandate commercial banks to systematically classify, review, and provision for loan exposures in alignment with International Financial Reporting Standards. The directive requires banks to place non-performing exposures on non-accrual status, reverse uncollected interest, and calculate expected credit losses using probability-weighted outcomes and forward-looking economic forecasts. Banks must establish board-approved loan review policies, conduct quarterly portfolio assessments, and submit action plans to reduce non-performing exposure ratios when they exceed five percent of total exposures.
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