Regulatory Alerts2011-11-09
IBA Circular No. 2 of 2011: Loan Loss Reserves
The Central Bank of Belize issued IBA Circular No. 2 of 2011 to prescribe procedures for licensed banks to establish and maintain loan loss reserves. The regulation mandates specific reserve ratios of 20%, 50%, and 100% for substandard, doubtful, and loss assets respectively, alongside a general reserve of 1% for non-adversely classified loans. It further requires quarterly evaluations, defines strict timelines for writing off uncollectible loans, and stipulates that charge-offs must be covered by specific reserves or transferred from general reserves.
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