Regulatory Alerts2011-10-16
Financial Services Asset Classification Requirements for Savings and Credit Cooperative Societies Directive, 2013
Issued by the Registrar of Financial Institutions under the Financial Services Act, 2010, this directive mandates Savings and Credit Cooperative Societies to implement rigorous asset classification, delinquency monitoring, and loan loss provisioning standards. It requires boards to adopt written risk management policies, classifies loans into performing, overdue, and loss categories, and mandates provisioning rates of 35 percent for overdue loans and 100 percent for loss assets. The directive further prohibits loan restructuring to evade adverse classification, restricts dividend distributions until adequate provisions are made, and establishes monetary penalties of up to five million Kwacha for non-compliance.
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