Romanian Ctrl Bk OKs Regulation Allowing Provisions Cut For Loss Loans

“Loss” loans are those with more than 90 days payment delay or with initiated judiciary procedures.

“The central bank’s Board approved the new regulation regarding the classifying of loans and deposits, and also the constitution, regularization and usage of risk provisions for loans,” the statement said.

The central bank also said the new set of rules intends to gradually align the national regulations to the International Financial Reporting Standards (IFRS) as regards guarantees to “loss” loans.

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According to the new rules, banks and financial institutions will set up internal norms to classify and provision loans, that have to be validated by the supervision department of the central bank.

Currently, banks set up provisions for the whole overdue sum and the afferent interest rates without deducing part of the guarantees of the “loss” loans.

The new regulation will come into force after being published in the Official Journal.