ADVOKS GLOBAL · KENYA
The Central Bank of Kenya (Mortgage Refinance Companies) Regulations, 2019
34. Classification of renegotiated or restructured loans
Edition: 2022-12-31 · In force
34. Classification of renegotiated or restructured loans
(1)Every mortgage refinance company shall classify a renegotiated or restructured loan in the substandard category unless—(a)all past due principal and interest is repaid in full at the time of renegotiation, in which case it may revert to 'Normal' classification;(b)all past due interest is repaid in full at the time of renegotiation in which case it may revert to 'Watch' classification.(2)A renegotiated or restructured loan classified as doubtful or loss shall continue to be classified as doubtful or loss unless—(a)all past due principal and interest is repaid in full at the time of renegotiation, in which case it may revert to 'Watch' classification or;(b)all past due interest is repaid in full at the time of renegotiation in which case it may revert to 'substandard' classification; and(c)all past due principal and interest is repaid in full at the time of renegotiation and there has been consistent repayment of three instalments in which case it may revert to 'Normal' classification.(3)A mortgage refinance company shall not restructure or renegotiate any loan or credit facility more than twice over the life of the original loan or credit facility.(4)Any loan or credit facility restructured for the second time shall be classified as "substandard" if all past due principal and interest is repaid in full at the time of renegotiation:Provided that if all past due interest is repaid in full at the time of renegotiation, the loan or credit facility shall be classified as doubtful.(5)A person who contravenes this regulation is liable to any of the sanctions provided for under regulation 57.