BoM Updates Guideline for Write-Off of Non-Performing Assets
BoM updated the guideline for write-off of non-performing assets for banks and non-bank deposit-taking institutions in Mauritius. In the initial release of the guideline on November 14, 2019, it was mentioned that, from July 01, 2019, the scope of application of the guideline will be extended to include non-bank deposit-taking institutions. The updated guideline applies to both banks and non-bank deposit-taking institutions that are licensed under the Banking Act 2004. Non-bank deposit-taking institutions will be given a timeframe of one year, as from July 01, 2019, to be in full compliance with the guideline.
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
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
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
APRA Consults on its Approach to Product Responsibility Under BEARRelated Articles
BCBS Amends Guidelines on Sound Management of AML/CFT Risks
BCBS amended the guidelines on sound management of risks related to money laundering and financing of terrorism (ML/FT).
US Agencies Finalize Amendments to Swap Margin Rule
US Agencies (Farm Credit Administration, FDIC, FED, FHFA, and OCC) finalized changes to the swap margin rule to facilitate implementation of prudent risk management strategies at banks and other entities with significant swap activities.
PRA Letter Sets Expectations on Approach to Managing Climate Risks
PRA published a letter that builds on the expectations set out in the supervisory statement (SS3/19) on enhancing banks' and insurers' approaches to managing the financial risks from climate change.
EBA Guidelines on Treatment of Structural Foreign Exchange Under CRR
EBA finalized the guidelines on treatment of structural foreign-exchange (FX) positions under Article 352(2) of the Capital Requirements Regulation (CRR).
FSB Issues Statement on Impact of COVID-19 Crisis on Benchmark Reform
FSB published a statement on the impact of COVID-19 pandemic on global benchmark transition.
IAIS Publishes List of Internationally Active Insurance Groups
IAIS published the list of Internationally Active Insurance Groups (IAIGs) publicly disclosed by group-wide supervisors.
FED Temporarily Revises FR Y-9C With Respect to PPPLF and CARES Act
FED has temporarily revised the reporting form on consolidated financial statements for holding companies (FR Y-9C; OMB No. 7100-0128).
EC Launches Consultation on Review of Solvency II Directive
EC launched a consultation on the review of the key elements of Solvency II Directive, with the comment period ending on October 21, 2020.
ECB Consults on Supervisory Approach to Consolidation in Banking
ECB launched a consultation on the guide that sets out supervisory approach to consolidation projects in the banking sector.
IAIS on Package for 2020 Data Collection on ICS and Aggregation Method
IAIS published technical specifications, questionnaires, and templates for 2020 Insurance Capital Standard (ICS) and Aggregation Method data collections.
