Document ID: chunk:federal_register_of_legislation:F2022L01576:body:0:p4
Version: federal_register_of_legislation:F2022L01576
Segment Type: other
Provision Reference: 
Character Range: 8624–11862

at the level of a particular credit obligation, rather than at the level of the borrower. As such, default by a borrower on one obligation, does not require an ADI to treat all other obligations to the ADI as being in default.
       (b)          past-due – an exposure for which any amount due under a contract (interest, principal, fee or other amount) has not been paid in full at the date when it was due. An exposure is considered past-due from the first day of missed payment.
       An exposure will remain outside of contractual arrangements notwithstanding any waiver of payments unless such an exposure has been restructured.
       (c)          restructured – an exposure for which:
(i)            a borrower is experiencing financial difficulty or hardship in meeting its financial commitments; and
(ii)         the ADI grants a concession to the borrower that it would not otherwise consider, whether or not the concession is at the discretion of the ADI or the borrower.[3]
Examples of concessions include, but are not limited to:
              (A)        extending a loan term;
              (B)        rescheduling the dates of principal or interest payments;
              (C)        granting new or additional periods of non-payment (grace period);
              (D)        reducing the interest rate, resulting in an effective interest rate below the current interest rate that borrowers with similar risk characteristics could obtain from the ADI or other institutions in the market;
              (E)         capitalising arrears;
              (F)         forgiving, deferring or postponing principal, interest or relevant fees;
              (G)        changing an amortising loan to an interest payment only;
              (H)        allowing the conversion of debt to equity of the borrower;
              (I)           deferring recovery/collection actions for extended periods of time;
              (J)           easing of covenants; and
              (K)        refinancing an existing exposure with a new contract, even if the terms of the new contract are no more favourable for the borrower than those of the existing transaction.

Adjustments and exclusions
14.         APRA may adjust or exclude a specific requirement in this Prudential Standard in relation to one or more specified ADIs or authorised NOHCs.

Previous exercise of discretion
15.         An ADI must contact APRA if it seeks to place reliance, for the purposes of complying with this Prudential Standard, on a previous exemption or other exercise of discretion by APRA under a previous version of this Prudential Standard.

Credit risk management framework
16.         An ADI must implement a credit risk management framework that is appropriate to its size, business mix and complexity. The credit risk management framework must, at a minimum, include:
       (a)          a credit risk appetite statement;
       (b)          a credit risk management strategy;
       (c)          policies and processes supporting clearly defined and documented roles, responsibilities and formal reporting structures for the management of credit risk;
       (d)          a designated credit risk management function;
       (e)          a management