In addition to the Guideline on the Computation of Loan-to-Value Ratio for Residential and
Commercial Property Loans and the Guideline on the Computation of Debt-to-Income Ratio
for Residential Property Loans, the Bank is also issuing, pursuant to section 100 of the
Banking Act 2004 and section 50 of the Bank of Mauritius Act 2004, three additional
macroprudential measures on Risk-Weighted Assets, Additional Portfolio Provisions and
Sectoral Limits to all banks as detailed below.
The respective Guideline on Standardised Approach to Credit Risk, Guideline on Credit
Impairment Measurement and Income Recognition, and Guideline on Credit Concentration
Risk will be revised to incorporate these three new macroprudential measures.
Risk-Weighted Assets
To address the systemic risk posed by both the stock of existing loans and new loans in the
construction sector, a bank shall risk-weight its fund-based and non fund-based credit
facilities secured by residential property and commercial real estate granted for the purpose
of purchase/construction as detailed below:
Housing
Loan up to Rs5.0 million
- risk weight of 35%
Loan greater than Rs5.0 mn up to Rs12.0 million
- risk weight of 100%
Loan exceeding Rs12.0 million
- risk weight of 125%
*The risk weights shall be applied on an incremental basis on the outstanding balances of the
loans
Past Due Loans
Loan up to Rs5.0 million
Loan greater than Rs5.0 million up to Rs12.0 million
Loan exceeding Rs12.0 million
Commercial Property
Loan up to Rs75.0 million
Loan exceeding Rs75.0 million
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The above risk weights shall apply only to claims secured by residential property and
commercial real estate for the purpose of purchase/construction. All other claims shall
be governed by the current requirements of the Guideline on Standardised Approach to Credit
Risk. This measure shall come into effect on 1 July 2014.
Additional Portfolio Provision
To ensure early provisioning against future credit losses due to rising corporate indebtedness
and non-performing loans in some key sectors of the economy, a bank shall make additional
portfolio provision over and above the existing portfolio provision as per the requirements of
the current Guideline on Credit Impairment Measurement and Income Recognition in a
phased manner as detailed below:
Table 1: Additional Portfolio Provision
Housing
Commercial, Residential and Land Parceling
(Classified under Construction sector)
Tourism sector
Personal sector
Effective Date
As from
As from
1 July 2014
1 July 2015
0.5%
0.5%
0.5%
1.0%
0.5%
0.5%
1.0%
1.0%
Sectoral Limit
To reduce sectoral concentration risk in the economy, a bank shall not exceed the following
sectoral limits expressed as a percentage of credit to the private sector (net of credit extended
to GBL companies) in a phased manner as detailed below:
Table 2: Sectoral Limit
As from
1 July 2014
15.0%
Effective Date
As from
1 July 2015
12.5%
As from
1 July 2016
12.5%
25.0%
15.0%
24.0%
12.5%
22.5%
12.5%
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