APRA releases response letter on its proposed treatment of loans impacted by COVID-19
The Australian Prudential Regulation Authority (APRA) has released a response to submissions on its proposed regulatory support for authorised deposit-taking institutions (ADIs) offering temporary financial assistance to borrowers impacted by COVID-19.
APRA’s response follows a one-week consultation launched on 30 July 2021.
Under the proposed approach, for eligible borrowers, ADIs will not need to treat a repayment deferral as a loan restructuring or the period of deferral as a period of arrears, whether or not the borrower has previously been granted a repayment deferral.
APRA is also extending the time period for the temporary adjustments to Prudential Standard APS 220 Credit Quality (APS 220) to apply to loans granted repayment deferrals from 8 July 2021 until 30 September 2021.
The response letter and the final version of APS 220 is available on the APRA website at: Treatment of loans impacted by COVID-19.
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The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, mutuals, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding around $9 trillion in assets for Australian depositors, policyholders and superannuation fund members.