Loans should be classified within levels 1 to 5 according to their conditions and the banks own assessment (see the table in 2 below). The onus will be on the bank to justify their assessment to the Central Bank’s satisfaction. This requirement applies to all loans and advances.

The classification described in the circular does not preclude banks from developing their own more granular grading system which in all cases should be clearly mapped to the 5 categories below.