Document ID: chunk:federal_register_of_legislation:F2022L01576:body:0:p2
Version: federal_register_of_legislation:F2022L01576
Segment Type: other
Provision Reference: 
Character Range: 3017–6128

of exposures and provisions
Non-performing exposures
Restructured exposures
Credit risk and accounting for expected credit losses
Prescribed provisioning
Supervisory limits
Adequacy of credit risk management and provisions
Special purpose engagements
Attachment A – Collateral valuation
Attachment B – Prescribed provisioning
Attachment C – Macroprudential policy: credit measures

Authority
     1. This Prudential Standard is made under section 11AF of the Banking Act 1959 (Banking Act).

Application
2.             This Prudential Standard applies to all authorised deposit-taking institutions (ADIs) other than purchased payment facility providers (PPF providers), subject to paragraph 3.
3.             Foreign ADIs must comply with the provisions in this Prudential Standard with the exception of paragraphs 24, 75 and 94 as relates to the quantitative aspects of capital adequacy.
4.             The obligations imposed by this Prudential Standard on, or in relation to, foreign ADIs only apply in relation to their Australian business.
5.             A reference to an ADI in this Prudential Standard, unless otherwise indicated, is a reference to:
       (a)          an ADI on a Level 1 basis; and
       (b)          a group of which an ADI is a member on a Level 2 basis.
6.             If an ADI to which this Prudential Standard applies is:
       (a)          the holding company for a group, the ADI must ensure that the requirements in this Prudential Standard are met on a Level 2 basis, where applicable; or
       (b)          a subsidiary of an authorised non-operating holding company (authorised NOHC), the authorised NOHC must ensure that the requirements in this Prudential Standard are met on a Level 2 basis, where applicable.
7.             This Prudential Standard commences on 1 January 2023.

Scope
8.             This Prudential Standard applies to all activities of the ADI that give rise to credit risk, except exposures that have been securitised, transferred or originated into securitisation vehicles that meet APRA's operational requirements for regulatory capital relief in Prudential Standard APS 120 Securitisation (APS 120).

Interpretation
9.             Terms that are defined in Prudential Standard APS 001 Definitions (APS 001) appear in bold the first time they are used in this Prudential Standard.
10.         Where this Prudential Standard provides for APRA to exercise a power or discretion, this power or discretion is to be exercised in writing.
11.         In this Prudential Standard, unless the contrary intention appears, a reference to an Act, Regulations, Prudential Standard, or Reporting Standard is a reference to the Act, Regulations, Prudential Standards, or Reporting Standard as in force from time to time.
12.         In this Prudential Standard, a reference to a borrower is also a reference to a counterparty.

Definitions
13.         The following definitions are used in this Prudential Standard in reference to an exposure:
       (a)          non-performing – an exposure that is in default. A default is considered to have occurred with