Amendments to Regulations on Non-Performing Loans
Bangko Sentral ng PiliPinas
OFFICE OF THE GOVERNOR
CIRCULAR NO. 772
Series of 2012
Subject: Amendments to Regulations on Non-Performing Loans
The Monetary Board in its Resolution No. 1395 dated 23 August 2012 approved the following amendments to the regulations on non-performing loans in the Manual of Regulations for Banks (MORB)
Section 1. Subsection X309.1 of the. MORB on accounts considered non-performing; definitions, is hereby amended, as follows:
"Subsection X309.1 Accounts considered non-performing; definitions
NON-PERFORMING LOANS (NPLS): "THE FOLLOWING ACCOUNTSSHALLCOMPRISE. ABANK'S GROSS
'a. NPLs shall, as a general rule, refer to loan accounts whose principal and/or
interest is unpaid for thirty (30) days or more after due.date or after they have become past due in accordance with existing rules and regulations. This shall apply to loans payable in lump sum and loans payable in quarterly, semi-
thereof shall be considered non-performing. annual or annual installments, in which case, the total outstanding balance
"b. In the case of loans payable in monthly instaliments, the total outstanding
balance thereof shall be considered non-performing when three (3) or more installments are in arrears.
"c. In the case of loans payable in daily, weekly or semi-monthly installments, the total outstanding balance thereof shall be considered non-performing at the
same time that they become past due in accordance with Sec. X306, i.e., the entire outstanding balance of the loan/receivable shall be considered as past
total loan/receivable balance. due when the total amount of arrearages reaches ten percent (10%) of the
"d. Restructured loans shall be considered non-performing in accordance with
Subsec. X322.1.
"e. All items in litigation as defined in the Manual of Accounts for Banks shall be considered non-performing.
"f. In the case of microfinance loans, past due/portfolio-at-risk (PAR) accounts as defined in Subsec. X361.1(b) shall be considered NPL
A. Mabini St., Malate 1004 Manila, Philippines * (632) 7087701 * www.bsp.gov.ph * [email protected]
"AS A COMPLEMENTARY MEASURE TO COMPUTING GROSS NPLS, BANKS SHALL LIKEWISE, COMPUTE THEIR NET NPLs, WHICH SHALL REFER TO GROSS NPLs LESS SPECIFIC
SUCH SPECIFIC ALLOWANCE FOR CREDIT LOSSES ON THE TOTAL LOAN PORTFOLIO SHALL NOT BE DEDUCTED FROM THE TOTAL LOAN PORTFOLIO FOR PURPOSES OF COMPUTING ALLOWANCE FOR CREDIT LOSSES ON THE TOTAL LOAN PORTFOLIO: PROVIDED, THAT
THE NET NPL RATIO.
Section 2. Subsection X309.4 of the MORB on the reporting requirement is hereby deleted.
This Circular shall take effect on 01 January 2013
FOR TH HE MONETARY BOARD:
IUan t ZGAJR
Officer-in-Charge
October 2012
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More in BSP Circulars
- Rules and regulations for the establishment of branches/ loan collection and disbursement points of microfinance-oriented banks(BSP Circular No. 340)
- Revisions in Reporting Requirements for Thrift Banks - Effective 1 January 2001(BSP Circular No. 270)
- Foreign currency denominated credit accommodations of banks' FCDUs/EFCDUs to the BSP(BSP Circular No. 386)
- Amendment of Subsection X268.3 of the Manual of Regulations for Banks (MORB) to include a provision on the grant of temporary rediscounting lines to newly merged or consolidated banks(BSP Circular No. 776)
- Approval of the guidelines governing the emergency loans and advances to banking institutions which shall supersede the existing provisions of Sec. X272 and the corresponding subsections of the MORB(BSP Circular No. 517)
- Amendments to the Guidelines on the Submission of Annual Reports and the Sanctions to be lmposed for Non-Disclosure of Relevant lnformation(BSP Circular No. 956)
- Amendments to the Manual of Regulations for Banks and Manual of Regulations for Non-Bank Financial Institutions(BSP Circular No. 237)
- Revised Manual of Rules and Regulations Governing Non-Trade Foreign Exchange Transactions - Chapters VI - X(BSP Circular No. 1318)
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