Featured Product

    APRA Consults on Standard for Reporting of COVID-19 Loans

    August 13, 2020

    APRA issued a letter to authorized deposit-taking institutions announcing its intent to formalize the capital measures and reporting requirements for COVID-19 loans through temporary legislative instruments. To this end, APRA is consulting on the draft Attachment E to APS 220, which is the prudential standard on credit quality, and on the new draft reporting standard ARS 923.2 on repayment deferrals. Through ARS 923.2, APRA intends to collect and publish entity-level data on COVID-19 impacted loans. The consultation period for these prudential and reporting standards ends on August 21, 2020. APRA also incorporated these developments into the frequently asked questions (FAQs) on the treatment of COVID-19 loans. Aligned with the APRA approach, the Australian Securities and Investments Commission (ASIC) will soon publish guidance on its expectations of retail lenders for when loan repayment deferrals end.

    In Attachment E to APS 220, the main adjustments to the capital treatment cover loans offered temporary repayment deferrals and loans that have been restructured to return to a regular repayment schedule. For repayment deferrals offered after September 30, 2020 (including extensions to existing deferral arrangements), the temporary capital treatment may only be applied where the deposit-taking institution is satisfied that the borrower has a reasonable prospect of being able to repay the loan (on original or restructured terms) when the repayment deferral period ends. Notwithstanding any other requirements in this prudential standard, a COVID-19 loan, as defined below, is subject to the provisions in this Attachment for the period of March 23, 2020 to March 31, 2021. A COVID-19 loan refers to a credit exposure that meets all of the following criteria:

    • The loan is provided to an eligible borrower. An eligible borrower for this purpose is either a natural person or a small- to medium-size enterprise (SME) with less than $10 million in total debt facilities outstanding.
    • The borrower’s ability to repay according to the original loan terms has been affected by the COVID-19 pandemic.
    • The loan was not 90 days past-due or impaired at the time a loan deferral or restructure was provided to the borrower.

    The reporting standard ARS 923.2 outlines the requirements for provision of information to APRA. This reporting standard applies to all authorized deposit-taking institutions  for reporting periods ending on or after June 30, 2020. The information required by this reporting standard must be provided by an authorized deposit-taking institution to which this reporting standard applies in respect of each calendar month. Information required to be provided for the June and July 2020 reporting periods may be provided to APRA at any time before September 02, 2020. APRA may change the reporting periods, or specified reporting periods, for a particular institution, to require it to provide the information required by this reporting standard more frequently, or less frequently, having regard to the particular circumstances of the institutions and the requirements of the Commonwealth Government of Australia. APRA may also grant an institution an extension of a due date, in writing, in which case the new due date for the provision of the information will be the date on the notice of extension. 

    Earlier, APRA had announced that it intends to publish the entity-level data on COVID-19 impacted loans, collected through the new reporting standard ARS 923.2. The first publication of ARS 932.2 data is expected to be in early September 2020. This publication will cover COVID-19 impacted loans, for individual authorized deposit-taking institutions, as at June 30, 2020 and July 31, 2020. The APRA publications are not a substitute for appropriate disclosure by individual institutions. Going forward, APRA expects that authorized deposit-taking institutions will provide the relevant data within 10 business days after the end of the reporting period to which the information relates. APRA then intends to publish the data by the end of the following month to which the information relates. 

    Related Links

    Comment Due Date: August 21, 2020

    Keywords: Asia Pacific, Australia, Banking, COVID-19, Credit Risk, Loan Moratorium, Regulatory Capital, Reporting, Basel, APS 220, ARS 923.2, FAQ, Payment Deferrals, APRA
    Featured Experts
    Related Articles

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News

    FSB and NGFS Publish Initial Findings from Climate Scenario Analyses

    The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.

    November 15, 2022 WebPage Regulatory News

    FSB Issues Reports on NBFI and Liquidity in Government Bonds

    The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.

    November 14, 2022 WebPage Regulatory News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News

    EU Finalizes Rules Under Crowdfunding Service Providers Regulation

    The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.

    November 08, 2022 WebPage Regulatory News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8596