Featured Product

    APRA Publishes Guidance for Reporting Loan Payment Deferrals

    May 01, 2020

    APRA issued a letter to all regulated entities about the Economic and Financial Statistics (EFS) guidance, which applies to loans and finance leases that have been granted relief, such as a repayment holiday or deferral, as part of a COVID-19 support package. The key topics covered in this guidance on reporting issues include loans and finance leases past due and impaired, provisions, interest rates, and reconciliation of stocks and flows. APRA also updated the frequently asked questions (FAQs) related to EFS.

    Loans and Finance Leases Past Due and Impaired

    In line with the recent guidance from APRA, loans that have been granted relief as part of a COVID-19 support package should be excluded from the reporting of loans and finance leases past due and impaired. Similarly, these loans need not be regarded as restructured and should not be reported as internal refinancing commitments.

    Provisions

    Reporting entities must continue to provision for loans and finance leases that have been granted relief under the relevant accounting standards. The FAQs on EFS set out how entities should report expected credit loss provisions in the EFS collection (FAQ No. 97).

    Interest Rates

    Where a loan has been granted relief as part of a COVID-19 support package, interest charged to a customer (but not received) should be added to the loan balance and included in credit outstanding. Capitalization will depend on the terms of the contract. Interest charged should be reported at item 7.6 on ARF 742.0A/B and item 5.6 on ARF 743.0. For the purposes of the EFS collection, the interest rate is the contractual interest rate to be paid by the borrower. Where a loan has been granted relief as part of a COVID-19 support package, the contractual interest rate for the loan should be included in all weighted-average interest rate calculations. Loans temporarily not being charged interest should be excluded from all weighted average interest rate calculations.

    Stocks and Flows Reconciliation

    Where a loan has been granted relief as part of a COVID-19 support package, institutions are required to report scheduled repayments regardless of whether or not a payment is received. In case of missed repayments or deferred repayments, report the amount by which scheduled repayments exceed actual repayments in repayment deficiencies at item 7.10 on Reporting Form ARF 742.0A/B Business Credit Stocks, Flows and Interest Rates (Standard/Reduced) or item 5.10 on Reporting Form ARF 743.0 Housing Finance. Also, where a borrower’s available redraw is used to cover a missed repayment or deferred repayment, this should not be reported as a repayment deficiency. Instead, report the amount that is drawn from available redraw balances to cover the repayment in other draw-downs at item 7.3 on ARF 742.0A/B or item 5.3 on ARF 743.0. A corresponding decrease in available redraw should be reported at item 6.3 on ARF 743.0.

     

    Related Links

    Keywords: Asia Pacific, Australia, Banking, Securities, COVID-19, Statistics, EFS, FAQ, ECL, Credit Risk, Loan Moratorium, Reporting, APRA

    Featured Experts
    Related Articles
    News

    HKMA Sets Out Regulatory Treatment for Personal Loan Guarantee Scheme

    HKMA has published a circular that sets out the regulatory and reporting treatment for loans that participating authorized institutions may grant to eligible borrowers under the 100% Personal Loan Guarantee Scheme.

    April 20, 2021 WebPage Regulatory News
    News

    ECB Completes Targeted Review of Internal Models of Banks

    ECB published the results of the assessment of internal models that banks use to calculate risk-weighted assets for credit, market, and counterparty credit risks.

    April 19, 2021 WebPage Regulatory News
    News

    PRA on Regulatory Treatment of Loans Under Mortgage Guarantee Scheme

    PRA published a statement on the regulatory treatment of retail residential mortgage loans under the Mortgage Guarantee Scheme, or MGS.

    April 19, 2021 WebPage Regulatory News
    News

    FCA Consults on Rules and Reporting Forms for Investment Firms Regime

    FCA is consulting, via CP21/7, on the second phase of proposed rules to introduce the UK Investment Firm Prudential Regime (IFPR).

    April 19, 2021 WebPage Regulatory News
    News

    HMT and BoE Decide to Explore Central Bank Digital Currency in UK

    HM Treasury and BoE announced the joint creation of a Central Bank Digital Currency (CBDC) Taskforce to coordinate the exploration of a potential central bank digital currency in UK.

    April 19, 2021 WebPage Regulatory News
    News

    EIOPA Sets Out Expectations on Use of Climate Risk Scenarios in ORSA

    EIOPA published an opinion to set out its expectations on the supervision of the integration of climate change risk scenarios by insurers in their Own Risk and Solvency Assessment (ORSA).

    April 19, 2021 WebPage Regulatory News
    News

    Bundesbank Updates AnaCredit Reporting Requirements

    Bundesbank published two circulars on AnaCredit reporting requirements. Circular 27/2021 covers changes to the reporting of branches, additional attributes to be reported for investment funds from August 01, 2021, and updates to the list of international organizations.

    April 16, 2021 WebPage Regulatory News
    News

    EC Sets Out Standards for MREL Reporting by Competent Authorities

    EC published the Implementing Regulation 2021/622 that lays down implementing technical standards for reporting of the minimum requirement for own funds and eligible liabilities (MREL).

    April 16, 2021 WebPage Regulatory News
    News

    BCBS to Advance Work on Suptech, Climate Risk, and Basel Monitoring

    BCBS has set out the strategic work priorities, as part of its the work program for 2021-22.

    April 16, 2021 WebPage Regulatory News
    News

    PRA Finalizes Supervisory Approach for Non-Systemic Banks in UK

    PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.

    April 15, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6874