Regulatory Alerts2021-12-14
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Circular dated December 14, 2021 regarding the temporary amendment to the treatment of non-performing loans for small and medium-sized companies in accordance with the instructions of International Financial Reporting Standard No. 9
The Central Bank of Egypt temporarily amends the classification of non-performing loans for small and medium-sized enterprises by extending the threshold for Stage 3 classification from 90 to 180 days of continuous overdue amounts. Customers previously in Stage 3 due to 90-day delinquency are upgraded to Stage 2 if amounts fall below 180 days, while those in Stage 3 as of December 31, 2019, due to the pandemic are upgraded to Stage 2 with continued Stage 3 expected credit loss calculations until full upgrade conditions are met. These measures apply for 18 months from the circular's date, and banks are instructed to restructure credit facilities based on financial and cash flow assessments using options such as term extensions, installment restructuring, or grace periods.
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