Regulatory Alerts2022-05-05
Prudential Credit Guidelines
The Eastern Caribbean Central Bank requires regional financial institutions to conduct annual reviews of at least 70 percent of their credit portfolios, classifying loans into five categories: Pass, Special Mention, Substandard, Doubtful, and Loss. The guidelines mandate tiered provisioning rates from zero to one hundred percent based on these classifications, prescribe interest suspension for non-performing loans and overdrafts exceeding approved limits, and require write-offs three months after loss classification. Additionally, the document establishes strict renegotiation conditions regarding borrower capacity, security adequacy, and a mandatory one-year holding period before upward reclassification.
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