CM-1.8.15
Past version: Effective from 01 Jun 2022 to 31 Mar 2023
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An exposure ceases to be non-performing and can be re-categorised as performing when all the following criteria are met simultaneously:
(a) The counterparty does not have any exposures that are past due for 90 days or more (see also Paragraph CM-1.8.6);
(b) Repayments have been made when due over a continuous repayment period of at least:
i. Six months for facilities with monthly or quarterly repayment instalments; and
ii. Twelve months for facilities with annual or semi-annual instalments.
However, if the payments are not clearly reflective of improvement in the
(c) The counterparty ’s financial situation has improved so that the full repayment of the exposure is likely, according to the original or, when applicable, modified conditions. This must usually require a credit review process that evaluates the borrower’s current capacity to repay, clarity on the source of cash flow available for debt repayments, improvements in the level of indebtedness and compliance with various debt covenants imposed by the licensee . Repayments through liquidation or enforcement of collateral is generally not considered as an improvement in the financial health of the borrower; and
(d) The exposure is not considered to be in ‘default’ or ‘impaired’ according to the applicable accounting framework.
Added: June 2022