Conscious of the challenges ahead, the Bank of Mauritius revised its Guideline on Credit Impairment Measurement and Income Recognition, which will come into effect as from 1 January 2020. To ensure consistency and address the concerns on modelling risk, the Guideline sets regulatory floors for provisioning.
That is, when a financial institution makes accounting provisions lower than the regulatory floors, the shortfall will be accounted for either through additional provisions or a charge to the equity of the financial institution.