Regulatory Alerts2019-10-23
Agreement No. 011-2019 Modifying Article 27 of Agreement No. 004-2013 on Credit Risk Management
The Banking Superintendence of Panama issued Agreement No. 011-2019 to modify Article 27 of Agreement No. 004-2013, extending the mandatory write-off period for uncollectible loans from one year to two years for specific secured categories. The regulation mandates that if the write-off is not executed within the extended period, banks must create regulatory reserves against retained earnings based on a defined percentage schedule, which are excluded from capital adequacy calculations. These provisions apply to residential mortgages, consumer loans with real estate guarantees, and corporate loans with real estate guarantees, with transitional rules for loans classified as uncollectible prior to 2018.
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