Banks in Guatemala will have to increase their capital from 10% to 14% when granting loans in U.S. dollars to people with incomes in quetzales.
Banking Superintendent Edgar Barquín explained that the measure, which affects a third of the entire loan portfolio in dollars -$982 million-, will force banks in the system to increase their capital in $48 million.
Since yesterday financial groups offering loans will be required to have reserves that equal 100% of the expired credits portfolio.
According to prensalibre.com, "In order to achieve this, generic reserves have been established to support current (specific) requests.
Banks should have reserves representing a percentage based on the last accrued months of portfolio, which range from 5% for a 30-day accrual and up to three month, and 100% for more than a year."
Tomorrow the Superintendence of Banks (SIB) will request that the Monetary Board approve a modification of the Regulations for Credit Risk Management.
Even though bank portfolios in arrears are not at a critical level, the SIB will request that the Monetary Board make the changes to the rules in order for banks to increase their reserves for bad debts (loans).
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