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7.1.1 Identification of Forbearance

Effective from Nov 23 2020 - Jun 30 2021
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Forbearance includes all exposures regardless of the measurement method for accounting purposes. Forbearance occurs when: 
 
i.The borrower is experiencing financial difficulty in meeting the financial commitments specified under the initial credit contract; and
ii.The finance company grants a concession that it would not otherwise consider whether or not the concession is at the discretion of the finance company and/or the counterparty. A concession is at the discretion of the borrower when the initial contract allows the borrower to change the terms and conditions of the contract in its own favor due to financial difficulty.
 
Forbearance is identified at the individual exposure level to which concessions are granted due to financial difficulty of the counterparty. For regulatory classification purposes, these exposures should only be reported in Stage 2B, 3A or 3B.