The Australian Prudential Regulation Authority (APRA) has announced a regulatory support for banks that are offering financial assistance to borrowers impacted by the COVID-19 pandemic.
Authorised deposit-taking institutions (ADIs) have rolled out their respective COVID-19 support packages that have been providing affected borrowers with relief options such as loan deferrals.
Under the regulatory support from APRA, ADIs will not need to treat the period of deferral as a period of arrears or a loan restructuring.
"This will apply to loans that are granted a repayment deferral of up to three months before the end of August 2021. This will provide banks and borrowers with additional flexibility to manage the period ahead," a statement from APRA said.
The measures will apply regardless of whether the borrower has previously been granted a repayment deferral due to the pandemic.
"For transparency, APRA will require ADIs to publicly disclose and report the nature and terms of any repayment deferrals and the volume of loans to which they are applied. ADIs must also still continue to provision for these loans under relevant accounting standards," APRA said.
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