Regulatory Alerts2022-09-22
Added · Updated
Prudential Regulations for Asset Classification, Loan Loss Provisions, and Interest Suspension on Non-Performing Loans
The Central Bank of Liberia has issued Regulation No. CBL/RSD/002/2021 to standardize asset classification, loan loss provisioning, and interest suspension for licensed banks and microfinance institutions. The regulation mandates a five-tier classification system based on delinquency periods, requiring specific provisions ranging from 5 percent for specially mentioned loans to 100 percent for loss assets, alongside a minimum 1 percent general provision. It further establishes strict rules for suspending interest accrual on non-performing loans, defining clear write-off criteria, collateral valuation standards, and specialized daily classification schedules for microfinance credit accommodations.