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.
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
Previous ArticleAPRA Consults on its Approach to Product Responsibility Under BEAR
EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.
The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.
In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.
In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.
EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).
ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).
EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.
BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.