Regulatory Alerts2025-10-22
Prudential Treatment of Distressed Restructured Credit Exposures
The Prudential Authority has issued Directive D11/2025 to standardize the definition, classification, and reporting of distressed restructured credit exposures across South African banks. The directive mandates that financial institutions implement robust policies and monitoring mechanisms to distinguish distressed restructures from business-as-usual arrangements by applying specific financial distress indicators and assessing reduced financial obligations under Regulation 67. By clarifying default treatment and quarterly reporting requirements for form BA 210, the directive replaces Directive 7 of 2015 and takes effect on 1 January 2027 to ensure consistent prudential capital assessment.
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