RegAlert2004-06-07
Added · Updated
Decision No. 006/2004-CSBF/P on the Risk Division Ratio of Credit Institutions
The President of the Commission for Banking and Financial Supervision (CSBF) amends Article 5 of Directive No. 003/94-CCBEF to update the risk division ratio weights for credit institutions based on currency, loan term, and beneficiary status. The revised regulation specifies distinct risk percentages for short-, medium-, and long-term loans, as well as doubtful and immobilized claims, distinguishing between free zone and non-free zone enterprises. Effective for the financial position as of end-July 2004, the decision mandates that unpaid maturities be reclassified as doubtful claims within 60 days and requires banks to enforce guarantees upon such reclassification.
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COMMISSION FOR BANKING AND FINANCIAL SUPERVISION ______________________ The President __________ DECISION NO. 006/2004-CSBF/P on the Risk Division Ratio of Credit Institutions ____________________ The President of the Commission for Banking and Financial Supervision (CSBF), Having regard to Law No. 95-030 of February 22, 1996 on the activity and supervision of credit institutions, Having regard to Directive No. 003/94-CCBEF of December 29, 1994 on the division of risks for banks and financial institutions, as amended by Directive No. 002/99-CSBF of July 22, 1999, H E R E B Y D E C I D E S:
Article 1:
In application of the provisions of Article 43 of Law No. 95-030 of February 22, 1996, and in complement to the provisions adopted by Decision No. 002/2004-CSBF/P dated April 21, 2004, Article 5 of Directive No. 003/94-CCBEF of December 29, 1994 on the division of risks is amended as follows:
« The risks defined in Article 3, net of the elements referred to in Article 4, are retained for the following risk weights:
a) - for loans and advances in national currency:
| Nature of credits | If beneficiary is non-free zone enterprise | If beneficiary is free zone enterprise |
|---|---|---|
| Short-term credits | ||
| Discount of local commercial paper (F1) | 75% | 100% |
| Mobilization of claims on foreign entities (F2) | 50% | 80% |
| Mobilization of administrative claims (F3) | 75% | - |
| Advance on merchandise stocks (F4) | 75% | 75% |
| Advance on product stocks (F5) | 50% | 75% |
| Cash facility, overdraft (F6) | 100% | 120% |
| Mobilization of credit sales (F7) | 75% | - |
| Working capital loan (F8) | 50% | 50% |
| Pre-financing of product collection (F9) | 75% | - |
| Medium and long-term credits | ||
| Medium-term loans | 75%[1], otherwise 100% | 75%[1], otherwise 100% |
| Long-term loans | 75%[1], otherwise 100% | 75%[1], otherwise 100% |
| Restructured claims | 120% | 175% |
| Immobilized claims | 150% | 175% |
| Doubtful, disputed and litigious claims | 150% | 175% |
[1] If leasing operations or loans secured by a duly formalized first-rank real security
b) - for loans and advances in foreign currency:
| Nature of credits | If beneficiary is non-free zone enterprise | If beneficiary is free zone enterprise |
|---|---|---|
| Short-term credits | ||
| 1. - Cash facility, overdraft (F6) | 150% | 175% |
| 2. - Other short-term loans | 120% | 150% |
| Immobilized claims | 175% | 200% |
| Doubtful, disputed and litigious claims | 175% | 200% |
c) - for signature guarantees and other risks mentioned in Article 3, their respective risk weights of 20% and 100% remain unchanged. »
Article 2:
Unpaid maturities must be reclassified as doubtful and disputed claims in accordance with Article 3, paragraph 3.2 of Directive No. 004/97-CSBF of June 2, 1997 on risk provisioning rules, in particular unpaid maturities on discounted securities (F1, F2, F3 and F7) within a period of 60 days from the date of default recognition. All banks are required to enforce received guarantees and counter-guarantees upon reclassification as doubtful, disputed and litigious claims. These guarantees and counter-guarantees are not taken into account in determining the actual recovery value when evaluating provisions as stipulated in Article 4, paragraph 4.4, second dash, of Directive No. 004/97-CSBF of June 2, 1997 on risk provisioning rules. The provisions of this Decision apply for the determination of the risk division ratio as from the position finalized at end-July 2004. Done in Antananarivo, on June 7, 2004. The President,
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Lineage: Superseded
Timeline
Amended 1 time · last 2007-01-29
- 2007-01-29
BFMDecision No. 001/2007-CSBF on the Risk Division of Credit Institutionssupersedes
This document amends: Decision No. 002/2004-CSBF/P on the Risk Division Ratio of Credit Institutions
Source: Banky Foiben'i Madagasikara — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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