APRA Further Extends Support for Borrowers Impacted by COVID-19
The Australian Prudential Regulation Authority (APRA) is further extending support for loan repayment deferrals amid pandemic. This announcement largely mirrors the temporary support measures APRA had announced in March 2020. which ended on March 31, 2021. APRA plans to release an updated prudential standard in July 2021 to formalize this new treatment, in line with the approach taken in 2020. This treatment will be formalized as part of the Attachment E (COVID-19 Adjustments) to APS 220, the prudential standard on credit quality, and ARS 923.2, the reporting standard on repayment deferrals.
A number of authorized deposit-taking institutions have announced COVID-19 support packages that will provide the affected small business and home loan customers with an option to defer their loan repayments. In response, APRA is providing regulatory relief to assist authorized deposit-taking institutions in supporting their customers through this period. Eligible borrowers include where the authorized deposit-taking institution reasonably believes that the borrower’s ability to repay according to the original loan terms has been, or is likely to be, affected by the COVID-19 pandemic and the loan was not 90 days past-due or impaired at the time a repayment deferral or restructure was provided to the borrower. For eligible borrowers, authorized deposit-taking institutions will not need to treat the period of deferral as a period of arrears or a loan restructuring. This will apply to loans that are granted a repayment deferral of up to three months before the end of August 2021. This will provide banks and borrowers with additional flexibility to manage the period ahead. The measures apply regardless of whether or not the borrower has previously been granted a repayment deferral due to the impact of the pandemic. For transparency, APRA will require authorized deposit-taking institutions to publicly disclose and report the nature and terms of any repayment deferrals and the volume of loans. Nonetheless, authorized deposit-taking institutions must continue to provision for these loans under the relevant accounting standards.
Related Link: Press Release
Keywords: Asia Pacific, Australia, Banking, COVID-19, Credit Risk, Loan Moratorium, Payment Deferrals, APS 220, ARS 923.2, Lending, 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.
Previous Article
ESMA Updates ESEF Reporting Manual and Q&A on Benchmarks RegulationRelated Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BCBS Issues Climate Risk Principles while HKMA Expresses Its Support
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.