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    CBB Proposes Changes to Rules on Non-Performing Exposures

    December 22, 2022

    The Central Bank of Bahrain (CBB) proposed amendments to the requirements on recategorization of certain non-performing exposures as performing under the Credit Risk Management (CM) Modules, with the consultation period ending on January 05, 2023.

    CBB issued a letter to all the retail banks and financial institutions requesting comments on this consultation, which is a part of the Credit Risk Management (CM) Modules under the CBB Rulebook Volume 1 (Conventional Banks) and Volume 2 (Islamic Banks). As stated in the draft modules, an exposure ceases to be non-performing and can be recategorized as performing when all the following criteria are met simultaneously:

    • The counterparty does not have any exposures that are past due for 90 days or more.
    • For corporates, repayments have been made when due over a continuous repayment period of at least six months for facilities with monthly or quarterly instalments and twelve months for facilities with annual or semi-annual instalments, for corporate customers. For retail customers, repayments have been made when due over a continuous repayment period of at least three months for facilities with monthly instalments and at least six months for facilities with quarterly instalments. 

     

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    Keywords: Middle East and Africa, Bahrain, Banking, Credit Risk, Credit Risk Management, Basel, Islamic Banking, NPE, Impairment Guidance, CBB 

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