Regulatory Alerts2007-07-01 | 23996Added · Updated
Guideline for the Measurement, Monitoring and Control of Impaired Assets
Financial institutions must implement effective credit risk management policies and impairment recognition processes, with the Board of Directors required to review material adverse exposures quarterly and ensure independent collateral valuations. Loans are classified as impaired when collectibility is compromised, with specific interim provisioning percentages mandated for sub-standard (20%), doubtful (50%), and loss (100%) categories. A general provision of at least 0.5% of the unexamined credit portfolio is required, subject to potential increases by the regulator based on risk assessments. Exemptions from provisioning apply to Trinidad and Tobago government-guaranteed loans and fully secured facilities in the process of collection.