Regulatory Alerts2023-07-05
Added · Updated
Governance of Credit Union - Practice Guidance Note.4
All credit unions registered under the Credit Union Act 1986 and the CBSI Act 2012 must implement an internal credit risk management framework and adhere to minimum standards for prudent lending. Credit unions are required to establish a written credit risk policy detailing roles, delegated authorities, loan limits, security requirements, and the 5 Cs of credit assessment. The board of directors must review this policy every two years, while credit committees must approve loans unanimously and maintain specific records. Additionally, credit unions must limit credit risk concentration to the lesser of 10% of total assets or 25% of institutional capital for related aggregate loans and maintain adequate provisions for loan losses.
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