Regulatory Alerts2016-03-11
Added · Updated
Instruction No. 16 to Banks: Prudential Rules on Credit Classification and Provisioning
The Central Bank of Congo establishes prudential rules for classifying credits into normal, at-risk potential, and litigious categories, with specific definitions for unpaid, doubtful, contentious, and irrecoverable loans based on delinquency periods and recovery prospects. Banks must create provisions within 12 months according to fixed rates determined by credit status and guarantee types, including specific tables for covered credits and overdrafts, while ensuring non-settled interest on distressed credits is fully provisioned. Non-compliance with these provisioning levels results in a penalty equal to 1% of the shortfall between required and actual levels at the end of each month. This instruction, effective from December 31, 2003, repeals all prior contradictory provisions.