On Apr. 8, UKRN CB changed requirements re collateral for bank loans.
UKRN CB revised rules on credit risk assessment for banks due to land market opening for legal entities and establishment of Fund for Partial Agricultural Guarantee Loans.
Summary
The changes aim to align with updated legislation, promote wider use of land as collateral for bank loans, and increase credit support for agricultural producers.
The list of acceptable security for calculating credit risk now includes guarantees from the Fund for Partial Guarantee of Loans in Agriculture as well as liquidity coefficients for certain types of collateral, notably agricultural land, have been increased.
Changes to managing problem assets strengthen supervisory board control in cases where non-performing asset division powers are delegated to the chief risk manager.
Due to updates to legislation, banks can take into account value of acceptable collateral when calculating credit risk without an insurance contract until Mar. 31, 2025.
Effectiveness
Changes are approved by resolution 39, which enters into force on May 24, 2024.
