Regulatory Alerts2013-03-26
DBFIA Practice Direction No. 3: Loan Loss Reserves
The Central Bank of Belize issued this Practice Direction to prescribe procedures for licensed banks and financial institutions to establish and maintain loan loss reserves. It mandates specific provision rates of 20%, 50%, or 100% for substandard, doubtful, and loss assets respectively, alongside a general reserve of 1% for non-adversely classified loans. The directive further requires quarterly evaluations, defines write-off timelines based on collateral status, and stipulates that write-offs must be charged against specific provisions.
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