JOR CB issued Circular No. 10/1/9887 concerning the instructions for classifying the credit exposures in addition to calculating the impairment allowances against them.
Key Provisions
Specified classification of credit exposure to 3 categories, the credit exposures with acceptable risks, credit exposures under monitoring, non-performed credit exposures.
Divided the non-performing credit exposures in accordance to three criteria, the first concerns substandard credit exposures, second is doubtful and third is the perished.
Listed conditions for countries classifying credit exposures within those categories.
Transfers terms between credit exposure classification categories, test periods terms.
Apply the value of eligible guarantee shown in appendix 1 to calculate the impairment allowance for direct credit exposure by subtracting them from original credit exposure.
Bank sets policies to exclude direct credit exposures from financial position statement.
Detailed bank's board of directors and executive management's responsibility in early identification of credit exposures that can be classified in the non-performing category.
Prohibit banks of granting direct facilities not specified with clear repayment schedule.
With the exception of overdraft ceilings that are granted for the purposes of financing working capital to meet client's short term needs in addition if the legal persons only.
Repealed instructions for classifying credit facilities and calculating the provisions for impairment and banking risk reserve No. 47 of 2008 and No. 1/10/11084 of 2018.
Effectiveness
Instruction shall be effective starting Jan. 1, 2025.
