This article highlights the key instructions issued by the Central Bank for charging penal interest/charges on loans such as:

‣ The introduction of a transparent penal charges policy

‣ The enhancement of regulatory norms for regulated entities

‣The central bank's definition of penal charges for loan non-compliance

‣ The importance of clarity in charges, where both the quantum and rationale must be transparently communicated

These instructions will be applicable from January 1, 2024.