Regulatory Alerts2024-07-01
Circular dated July 1, 2024 regarding the gradual cancellation of the treatment of non-performing loans for small and medium enterprises according to the instructions of IFRS No. 9
The Central Bank of Egypt has agreed at its scheduled meeting on June 25, 2024, to phase out the temporary waiver for small and medium-sized enterprises (SMEs) regarding applying International Financial Reporting Standards (IFRS 9). This will take place in three stages until December 31, 2025. Additionally, a new rule has been put in place regarding employee loans. If SMEs cannot fulfill the conditions for debt relief/restructuring by January 1, 2026, they must adhere to the following timeline: - By December 31, 2024: A loan balance of not more than 180 days past due is allowed. - Between January 1 and June 30, 2025: A loan balance of up to 150 days past due is permitted. - After July 1, 2025: Employees' loans are to be repaid within a maximum of 120 days past due. - The employment extension period for promoting employees from the third tier to the second tier will apply if all criteria and requirements for the second tier have been met. Loans must be paid off or restructured, with a maximum 90-day grace period by December 31, 2025. The Central Bank of Egypt expresses its deep gratitude and appreciation to all stakeholders involved in this matter.