Regulatory Alerts2019-01-31
Regulation on Credit Risk Management for Non-Bank Financial Institutions
The Central Bank of the Republic of Kosovo mandates non-bank financial institutions engaged in lending or leasing to implement comprehensive credit risk management systems, including defined strategies, organizational structures, and reporting protocols. The regulation establishes a five-tier credit classification framework ranging from standard to loss, alongside mandatory loan loss provisioning rates of 20 percent for substandard, 50 percent for doubtful, and 100 percent for loss exposures. Institutions must rigorously document rescheduling decisions, apply split classification rules where collateral protects portions of exposures, and submit periodic risk reports to their boards while remaining subject to CBK supervisory reviews and punitive measures for noncompliance.