Regulatory Alerts2021-02-25 | NRP-26Added · Updated
Technical Standards for the Evaluation and Classification of Agricultural Sector Credits and Establishment of Safeguard Reserves
The Committee of Standards of the Central Reserve Bank of El Salvador mandates supervised entities granting agricultural credits to classify debtors monthly and establish minimum safeguard reserves based on risk categories. Entities must deduct specific guarantee values, such as 100% for cash deposits and 70% for first mortgages, from loan balances to determine reserve requirements, which range from 0% for normal credits to 100% for unrecoverable ones. The regulation imposes stricter documentation and evaluation thresholds for credits exceeding US$350,000 and requires a maximum 5% reserve for coffee sector credits participating in technical assistance programs. These standards became effective on March 15, 2021, for all financial institutions subject to the Superintendency of the Financial System.