CM-3.3.3
For the purpose of this Module, the following definition of non-accrual items applies:
(a) Financing facilities and investments where there is reasonable doubt about the ultimate collectability of principal within a time frame established by the bank. Non-accruals would include all facilities against which a specific provision has been established, or a write-off taken even if the facility is not in breach of contractual requirements. Refer to AAOIFI's FAS 11 on recognition of provisions and reserves; and
(b) Financing facilities and investments , not included in (a), where contractual payments of the principal are 90 or more consecutive days in arrears, and where the 'fair value' of security is insufficient to cover repayment. In line with the principles outlined above, a facility should be classified as non-accruing earlier than 90 days where it is evident that full, or partial repayment of the amount is unlikely even though the full extent of the loss cannot be clearly determined.
Amended: April 2012
October 07
October 07