Regulatory Alerts2022-03-14
Added · Updated
On the Reclassification of Distressed Loans and Their Provisioning
The Central Bank of Djibouti mandates that any loan with at least one unpaid installment exceeding 30 days must be reclassified as a distressed loan and provisioned quarterly based on the severity of the delay. Specifically, institutions must set provisions at 20%, 50%, or 100% for payment delays of 31–90, 91–180, and 181–360 days respectively, while claims overdue beyond 360 days are written off but tracked off-balance sheet for recovery, with overdrafts subject to 75% or 100% provisions at 30 and 90 days past due. Upon reclassification, interest recognition ceases and is monitored off-balance sheet, with any subsequent recoveries recorded as exceptional income, and the directive takes effect immediately upon signature.
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