Regulatory Alerts2025-09-12 | BPRD Circular Letter No. 20Implementation of International Financial Reporting Standard 9 (IFRS 9) - DPD Criteria for Banks and DFIs
This document establishes the Days Past Due (DPD) criteria and stage allocations required for IFRS 9 impairment provisioning across various banking and financial portfolios, including corporate, consumer, housing, SME, and agriculture lending. It mandates that provisions must be determined by selecting the higher of the IFRS 9 Expected Credit Loss (ECL) calculation or existing Prudential Regulation (PR) requirements for accounts in Stage 3. Financial institutions are explicitly advised that these DPD thresholds function as a backstop, and they must develop internal criteria tailored to shared credit characteristics rather than relying solely on facility-specific classifications.
Annexure-C
DPD Criteria for Banks and Development Finance Institutions (DFIs)
| Particular | Classification** | Days Due* | Stage Allocation under IFRS 9 | Provisions to be made |
|---|---|---|---|---|
| PRUDENTIAL REGULATIONS FOR CORPORATE /COMMERCIAL BANKING | Performing / Underperforming / Non-performing / Substandard / Doubtful / Loss / Trade Bills | 1-59 / 60-89 / - / 90+ / 180+ / 1yr+ / 181+ | Stage 1 / Stage 2 / - / Stage 3 | As per IFRS 9 ECL Modelling / Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements |
| PRUDENTIAL REGULATIONS FOR CONSUMER FINANCING | (Credit Card Advances R8, Auto Loans R14, Personal Loans R21) | 1-59 / 60-89 / - / 90+ / 180+ | Stage 1 / Stage 2 / - / Stage 3 | As per IFRS 9 ECL Modelling / Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements |
| HOUSING FINANCE PRUDENTIAL REGULATIONS | Performing / Underperforming / OAEM / Non-performing / Substandard / Doubtful / Loss | 1-59 / 60-89 / 90-179 / - / 180+ / 1yr+ / 2yrs+ | Stage 1 / Stage 2 / - / Stage 3 | As per IFRS 9 ECL Modelling / Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements |
| PRUDENTIAL REGULATIONS FOR SMALL & MEDIUM ENTERPRISES FINANCING | Performing / Underperforming / Non-performing / OAEM / Substandard / Doubtful / Loss / Trade Bills | 1-59 / 60-89 / - / 90+ / 180+ / 1yr+ / 18m+ / 181+ | Stage 1 / Stage 2 / - / Stage 3 | As per IFRS 9 ECL Modelling / Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirement |
| PRUDENTIAL REGULATIONS FOR AGRICULTURE FINANCING | Performing / Underperforming / OAEM / Non-performing / Substandard / Doubtful / Loss | 1-59 / 60-89 / 90-364 / - / 1yr+ / 18m+ / 2yrs+ / 3yrs+ | Stage 1 / Stage 2 / - / Stage 3 | As per IFRS 9 ECL Modelling / Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements *** |
| PRUDENTIAL REGULATIONS FOR INFRASTRUCTURE PROJECT FINANCING | Performing / Underperforming / OAEM / Non-performing / Substandard / Doubtful / Loss | 1-59 / 60-89 / 90-179 / - / 180+ / 365-2yrs / >2yrs | Stage 1 / Stage 2 / - / Stage 3 | As per IFRS 9 ECL Modelling / Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements |
DPD Criteria for Microfinance Banks (MFBs)
| Particular | Classification** | Days Due* | Stage Allocation under IFRS 9 | Provisions to be made |
|---|---|---|---|---|
| Microfinance Loans (General) | Performing / Underperforming / Non-performing / Substandard / Loss | 1-59 / 60-89 / - / 90+ / 180+ | Stage 1 / Stage 2 / - / Stage 3 | As per IFRS 9 ECL Modelling / Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements |
| Housing Loans | Performing / Underperforming / Non-performing / Substandard / Doubtful / Loss | 1-59 / 60-179 / - / 180+ / 1yr+ / 2yrs+ | Stage 1 / Stage 2 / - / Stage 3 | As per IFRS 9 ECL Modelling / Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements |
| Microenterprise Loans | Performing / Underperforming / Non-performing / Substandard / Doubtful / Loss / Trade Bills | 1-59 / 60-179 / - / 180+ / 1yr+ / 18m+ / 181+ | Stage 1 / Stage 2 / - / Stage 3 | As per IFRS 9 ECL Modelling / Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements |
| Agriculture and Livestock Loans | Performing / Underperforming / Non-performing / Doubtful / Loss | 1-59 / 60-179 / - / 180+ / 1yr+ | Stage 1 / Stage 2 / - / Stage 3 | As per IFRS 9 ECL Modelling / Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements |
This annexure needs to be read in line with the instructions given in para 3.4, 3.5 and 3.13 of SBP's IFRS 9 Application Instructions. This annexure needs to be read in line with the instructions given in para 3.4, 3.5 and 3.13 of SBP's IFRS 9 Application Instructions.
- Where mark-up/interest or principal is overdue by the specified days or more from the due date. Where Trade Bills (Import/Export or Inland Bills) are not paid/adjusted within specified days of the due date.
- Where mark-up/interest or principal is overdue by the specified days or more from the due date. Where Trade Bills (Import/Export or Inland Bills) are not paid/adjusted within specified days of the due date.
** The classification will be applicable on all financial assets that come under the scope of impairment under IFRS 9. ** The classification will be applicable on all financial assets that come under the scope of impairment under IFRS 9.
*** The DPD criteria can be relaxed accordingly against the relaxations provided to FI's agri loans. *** The DPD criteria can be relaxed accordingly against the relaxations provided to FI's agri loans.
Disclaimer: The stage allocations against days past due (DPD) indicator is to be considered only as a backstop for the rebuttable presumption allowed under IFRS 9 for DPD. The FIs are advised to devise their own DPD criteria for portfolios having shared credit characteristics (as described under IFRS 9) rather than facility wise. Disclaimer: The stage allocations against days past due (DPD) indicator is to be considered only as a backstop for the rebuttable presumption allowed under IFRS 9 for DPD. The FIs are advised to devise their own DPD criteria for portfolios having shared credit characteristics (as described under IFRS 9) rather than facility wise.