BoM Updates Guideline for Write-Off of Non-Performing Assets

The guideline aims to provide a broad framework for the write-off of non-performing assets on the books of financial institutions if the prospects of recovery are weak. It also introduces an element of prudence by requiring financial institutions to write-off non-performing assets in a timely manner. The guideline requires all banks and non-bank deposit taking institutions to have a board-approved policy with respect to write-off of non-performing assets. It further enunciates the broad write-off principles while emphasizing that a write-off by a financial institution does not signify the forfeiture of its legal right to claim its dues. The guideline requires that the write-off policy should set forth suitable time periods for the write-off of different categories of non-performing assets, based on the individual recovery experience of a financial institution. However, the maximum time for the full write-off of exposures toward corporate and retail (including mortgages) should not exceed 7 years and 5 years, respectively.

Related Links

• Press Release
• Updated Guideline
• Initial Guideline

Effective Date: July 01, 2019 (Non-Bank Deposit Takers)

Keywords: Middle East and Africa, Mauritius, Banking, Non-Bank Deposit-Taking Institutions, Credit Risk, NPLs, NPA, BoM