CBB Proposes Changes to Rules on Non-Performing Exposures
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.
- Consultation Letter (PDF)
- CM Module Amendment for Conventional Banks (PDF)
- CM Module Amendment for Islamic Banks (PDF)
Keywords: Middle East and Africa, Bahrain, Banking, Credit Risk, Credit Risk Management, Basel, Islamic Banking, NPE, Impairment Guidance, CBB
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