Regulatory Alerts2017-07-06
Asset Classification and Provisioning Regulations
The Central Bank of Myanmar issued these regulations to standardize how all domestic banks classify loans and advances into five risk categories based on days past due. Banks must calculate specific provisions ranging from zero to one hundred percent against outstanding balances, maintain a general loan loss reserve of up to two percent, and suspend or reverse accrued interest for doubtful and loss assets. The rules mandate annual overdraft clearance, prescribe detailed security valuation criteria, and allow a three-year staggered transition for provisioning shortfalls starting six months after issuance.
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