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Banks are mandated to establish BRUs by mid-May 2024 and ensure full compliance with the circular’s requirements by July 1, 2024. The expanded mandate of BRUs seeks to facilitate the sustainable recovery of viable businesses impacted by exceptional macroeconomic conditions and manage the increased volume of impaired assets within licensed banks.
The central bank solicited input from relevant stakeholders, including the banking sector and the chamber of commerce, during the formulation of these guidelines.
The challenging macroeconomic environment in recent years has disrupted the revenue-generating activities of businesses, hampering borrowers’ ability to meet loan obligations and impeding the recovery process for licensed banks.
Consequently, the establishment of BRUs is deemed essential to aid both performing and non-performing borrowers whose businesses exhibit fundamental viability.
For large banks with over 50 branches, the option of setting up BRUs at prominent branches or regional offices is encouraged to enhance support for affected borrowers in reviving their businesses more efficiently.
Assessment of a business’ fundamental viability is pivotal for licensed banks when considering business revival. This assessment incorporates both financial and non-financial indicators.
The central bank urged collaborative efforts between licensed banks and borrowers to ensure the sustainable revival of viable businesses, fostering economic growth and contributing to the national economy’s development.
Fibre2Fashion News Desk (DR)