Approved by the Resolution of Board of National Bank of Tajikistan of December 24, 2009 No. 346

The instruction No. 177 about procedure for forming and use of reserve on covering of potential losses and fund of covering of possible losses for loans

The instruction No. 177 "About procedure for forming and use of reserve on covering of potential losses and fund of covering of possible losses for loans" is developed according to article 42 of the Law of the Republic of Tajikistan "About National Bank of Tajikistan", article 28 of the Law of the Republic of Tajikistan "About banking activity" and article 28 of the Law of the Republic of Tajikistan "About the microfinancial organizations" and regulates management and supervision of credit risk in bank system of the republic, establishes procedure for forming and use of reserve on covering of potential losses and fund of covering of possible losses for loans.

1. General provisions

1) Accomplishment of the Instruction No. 177 "About procedure for forming and use of reserve on covering of potential losses and fund of covering of possible losses for loans" (further - the Instruction) is obligatory for all credit institutions and the microcredit deposit institutions (further - the organization).

2) the Instruction determines procedure for classification of loan portfolio and forming of fund of covering of possible losses for loans (further - FPVP), obligatory for all organizations, irrespective of forms of their property.

3) the Reserve on covering of potential losses is the amount intended for covering of potential losses on the standard credits.

4) FPVP is the amount intended for covering of possible losses according to "non-standard", "doubtful", "dangerous" and "hopeless" loans.

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