The Australian Prudential Regulation Authority (APRA) has released a response to submissions on its proposed regulatory support for authorised deposit-taking institutions (ADIs) offering temporary financial assistance to borrowers impacted by COVID-19.

APRA’s response follows a one-week consultation launched on 30 July 2021. 

Under the proposed approach, for eligible borrowers, ADIs will not need to treat a repayment deferral as a loan restructuring or the period of deferral as a period of arrears, whether or not the borrower has previously been granted a repayment deferral.

APRA is also extending the time period for the temporary adjustments to Prudential Standard APS 220 Credit Quality (APS 220) to apply to loans granted repayment deferrals from 8 July 2021 until 30 September 2021. 

The response letter and the final version of APS 220 is available on the APRA website at: Treatment of loans impacted by COVID-19.