Regulatory Alerts2010-05-06 | CD-SIBOIF-626-2-MAY6-2010Added · Updated
Special Rule for the Application of Law No. 716, Special Law for the Establishment of Basic Conditions and Guarantees for the Renegotiation of Debts Between Microfinance Institutions and Defaulting Debtors
The Superintendence of Banks and Other Financial Institutions establishes implementation rules for Law No. 716, defining eligible microfinance borrowers as those in default as of June 30, 2009, and excluding those who defaulted later, settled debts, or failed to negotiate voluntarily within 30 days. The rule mandates case-by-case renegotiation based on repayment capacity, grants total dispensation of late interest and collection costs, and requires institutions to report restructuring agreements within 48 hours and submit monthly consolidated reports. It further specifies that restructured credits retain their prior risk classification unless specific payment performance criteria are met to upgrade to category A, and outlines procedures for obtaining certifications and imposing sanctions.
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