Default status determines restart of credit probation
The South African Reserve Bank's Prudential Authority (PA) proposed on October 26, 2026, to clarify probation rules for repeatedly restructured distressed credit. Comments on the replacement for Directive 11 of 2025 close on November 9, 2026.
Two treatments for repeat restructures
The draft resolves conflicting instructions in paragraphs 2.9.4 and 2.9.8 of Directive 11 of 2025.
Further restructuring due to financial distress during probation would restart probation only where the exposure is not classified in default.
For defaulted exposures, further restructuring would not restart or reset probation; default classification would remain until rehabilitation requirements are met.
The PA seeks to prevent repeated restructuring from obscuring credit deterioration or delaying default classification.
Other substantive requirements remain unchanged.
Retail and wholesale probation normally lasts at least 12 months; exceptional wholesale exits require at least six months and authorised internal credit committee approval.
Existing deadlines remain binding
Directive 12 of 2025 retains all timelines and obligations.
The draft retains a phase-in ending December 31, 2026, January 1, 2027 requirements for new restructures and an April 2027 reporting start in quarterly form BA 210. The replacement would take effect upon publication.
Consultation covers only paragraphs 2.9.4 and 2.9.8. Send comments to rsd-creditrisk@resbank.co.za, copying PA-Standards@resbank.co.za, for Makgale Molepo and Eric Sithole.
Chief Executive Officer Fundi Tshazibana is the named signatory.
No shortcut out of default
The distinction turns on default classification, not simply on whether a loan is restructured again.
Defaulted exposures must satisfy rehabilitation requirements rather than begin probation anew.
The proposal preserves the remaining prudential framework and leaves Directive 12 of 2025 enforceable.
Source: Proposed Directive - Replacement of D11 of 2025
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