Public Notice: Transitional Arrangements for Regulatory Capital Treatment of IFRS 9 Provisions

PUBLIC NOTICE

TRANSITIONAL ARRANGEMENTS FOR REGULATORY

CAPITAL TREATMENT OF IFRS 9 PROVISIONS

13 January 2021

In the current economic context, and in line with arrangements being made by central banks and other regulatory institutions around the world, the Bank of Mauritius ("Bank") is introducing transitional arrangements for the regulatory capital treatment of IFRS 9 provisions. This decision aims at alleviating the impact of the COVID-19 pandemic on the provisioning levels of banks and non-bank deposit taking institutions ("financial institutions").

The transitional arrangements will allow financial institutions to add back a portion of their IFRS 9 provisions to their regulatory capital. These arrangements, which will start this year, will phase out over a 4-year period.

Financial institutions electing to apply the above-mentioned transitional arrangements will be required to make a disclosure on same in their audited financial statements.

The details of the transitional arrangements are annexed for ease of reference. The documents are also available on the Bank's website on https://www.bom.mu/financial- stability/supervision/guideline

B A N K O F M A U R I T I U S S i r W i l l i a m N e w t o n S t r e e t , P o r t L o u i s , M a u r i t i u s

Telephone: [phone]

Email: [e-mail]

Website: www.bom.mu

BOM/BSD 42/January 2021

BANK OF MAURITIUS

Transitional Arrangements for Regulatory Capital Treatment of

IFRS 9 Provisions under Expected Credit Losses

January 2021

	Table of Contents
Introduction.................................................................................................................................................	1
Transitional arrangements for regulatory capital treatment of IFRS 9 provisions for expected
credit losses (ECL) ......................................................................................................................................	2
Annex 1	- Example of calculation of transitional arrangements ............................................................	4
Annex 2	- Return for transitional arrangements for banks ....................................................................	6
Annex 3	- Return for transitional arrangement for non-bank deposit taking institutions ..................	8

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