APRA Finalizes Temporary Regulatory Treatment for COVID-Impacted Loans
The Australian Prudential Regulation Authority (APRA) published final version of the prudential standard on credit quality (APS 220) and response to the proposed regulatory support for authorized deposit-taking institutions offering temporary financial assistance to borrowers impacted by the pandemic. As a response to the consultation, APRA received feedback on adjustments to APS 220 and on the related reporting requirements. The responses largely focused on the time period for the regulatory support and other more minor clarifications. Thus, APRA is extending, from July 08, 2021 until September 30, 2021, the time period for the temporary adjustments to APS 220 to apply to loans that were granted repayment deferrals.
The one-week consultation had been launched on July 30, 2021. Under the proposed approach, for eligible borrowers, authorized deposit-taking institutions will not need to treat a repayment deferral as a loan restructuring or the period of deferral as a period of arrears, whether or not the borrower has previously been granted a repayment deferral. The consultation covered proposal to give effect to the temporary prudential treatment by way of adjustments to APS 220, largely mirroring the approach in March 2020. The consultation also covered proposal to collect entity-level data on these loans, by recommencing reporting via the reporting form ARF 923.2 on COVID-19 repayment deferrals that meet a minimum threshold. APRA also proposed to require authorized deposit-taking institutions to publicly disclose the nature and terms of repayment deferrals and the volume of loans to which they are applied, as in 2020. Collectively, these measures aim to assist institutions in supporting their small business, home loan, and other retail customers through this period. APRA intends to register APS 220 on the Federal Register of Legislation, with the standard commencing upon registration. Reporting requirements under ARF 923.2 have been communicated to the relevant authorized deposit-taking institutions.
Related Links
Keywords: Asia Pacific, Australia, Banking, COVID-19, Credit Risk, Credit Quality, Loan Repayment, APS 220, APS 923.2, Payment Deferrals, Loan Moratorium, Lending, Reporting, APRA
Featured Experts

Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Related Articles
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.