Circular to Banks No. 7 of 2020 – Exceptional Measures to Support Individuals

Circular to Banks No. 7 of 2020
Dated March 25, 2020
Subject: Exceptional measures to support individuals.

The Governor of the Central Bank of Tunisia,
Having examined Law No. 53 of 2016 dated April 13, 2016, on establishing the basic system of the Central Bank of Tunisia; And Law No. 84 of 2016 dated July 11, 2016, on banks and financial institutions; And Circular No. 84 of 1994 dated December 25, 1994, concerning methods for granting, monitoring, renewing, and consolidating loans, along with subsequent amendments; And Circular No. 68 of 1981 dated December 14, 1981, concerning risk classification and monitoring of commitments, along with subsequent amendments; And Circular No. 11 of 2014 dated November 1, 2014, concerning the credit-to-deposit ratio; And Circular No. 2 of 2020 dated March 18, 2020, concerning exceptional measures to support institutions and professionals; And Opinion of the Compliance Committee No. 4 of 2020 dated March 13, 2020; Has decided as follows:

Article 1 – Banks must take the necessary measures aimed at supporting individuals in addressing the challenges posed by the COVID-19 pandemic.

Article 2 – Banks and agencies must increase loan installments for individuals with a net monthly disposable income under one thousand dinars, who took out loans primarily between March 1, 2020, and the end of September 2020, with a moratorium on repayment.
This measure includes non-special loans granted to clients classified as 1 and 2 at the end of December 2018, within the meaning of Article 4 of Circular No. 68 of 1981 dated December 14, 1981. These support measures are considered loan restructuring and the moratorium extension is taken into account when calculating debt aging, according to Circular No. 68 of 1981 dated December 14, 1981, for beneficiaries under this Article.

Article 3 – Banks may apply the measures mentioned in the first paragraph of Article 2 to individuals with a net monthly disposable income between one thousand and two thousand five hundred dinars, classified as 3 and 4 at the end of December 2018, according to Article 4 of Circular No. 68 of 1981, subject to case-by-case assessment based on their financial situation.
The moratorium extension is also taken into account when calculating debt aging for beneficiaries under this Article.

Article 4 – Throughout the validity of this circular and Circular No. 2 of 2020 dated March 18, 2020, and notwithstanding Articles 5 and 6 of Circular No. 11 of 2014 dated November 1, 2014, banks whose credit-to-deposit ratio exceeds 160% at the end of any quarter must increase this ratio by 1% each quarter. This increase is based on the target ratio at the end of the previous quarter, as indicated in Appendix No. 1 to this circular.
The credit-to-deposit ratio is defined by the following numerator and denominator:
Numerator: Credit balances with clients in dinars, minus deferred maturities within the framework of exceptional measures for institutions, professionals, and individuals in dinars. Denominator: Sum of the following elements:

• Client deposits and assets in dinars, after deducting other client receivables;
• Certificates of deposit;
• Special resources in dinars and foreign currency, including interbank loans and money market loans.
  Banks must report the calculation elements of the ratio to the Central Bank of Tunisia according to Appendix No. 1 of this circular.

Article 5 – Subject to the provisions of Article 8 of Circular No. 2 of 2020 dated March 18, 2020, and Appendix No. 6.

Article 6 – Banks must report monthly to the Central Bank of Tunisia, via the data exchange system, the total amount of deferred installments and the number of beneficiaries of exceptional support measures for individuals.

Article 7 – This circular takes effect from the date of its publication.

The Governor,
Marouan Abbassi

Appendix No. 1 to Circular to Banks No. 7 of 2020 dated March 25, 2020
Bank: _________________________
Calculation elements of the "Credits/Deposits" ratio as at …….
(In thousands of dinars unless otherwise indicated)

Code RCM00	Label	Quarter T-1	Quarter T
AC030000000000	Claims on customers in dinar<br>Maturities deferred under exceptional measures for enterprises, professionals and individuals in dinar
AC030000000000	Claims on customers in dinar net of deferred maturities under exceptional measures for enterprises, professionals and individuals (1)
PA030000000000	Deposits and customer balances in dinar (2)
PA030900000000	Other amounts due to customers in dinar (3)
PA040101000000	Certificates of deposit (4)
PA040300000000	Special resources in dinar and foreign currency (5)
PA020102010900	Other borrowings non-resident banks established in Tunisia in dinar and foreign currency (6)
PA020102020900	Other borrowings non-resident banks established abroad in dinar and foreign currency (7)
PA020101090000	Other borrowings resident banks in dinar and foreign currency (8)
PA040209000000	Other borrowings contracted in dinar and foreign currency (9)
	Denominator (10)=(2)-(3)+(4)+(5)+(6)+(7)+(8)+(9)
	Ratio "Credits/Deposits" (11)=(1)/(10) (in %)	(12)	(13)
	Target ratio of the quarter (in %)	(14)
	Excess of claims ((13)-(14))*(10)