Provisioning & MAS loan classification standards Agent AI

INVOKED WHEN: month-end batch runs or CBS flags an account crossing a DPD threshold requiring classification review

• –Reads the CBS DPD position for every active loan and applies the MAS loan classification standards classification rules: accounts at 90 DPD or more are classified Sub-Standard; accounts that have remained Sub-Standard for 12 months are classified Doubtful; accounts that have remained Doubtful for prescribed periods or where the recovery prospect is remote are classified Loss. Each classification is based on the DPD count alone — the MAS loan classification standards rules are mechanical, not judgment-based.
• –Checks for upgrade eligibility: an account that was classified as NPL but has since regularised (all overdue amounts paid, account performing for at least the prescribed regularisation period under MAS loan classification standards) is eligible for upgrade back to Standard. The agent identifies upgrade-eligible accounts and flags them for the authorised official's review — upgrading an NPL account is an equally regulated act as classifying one.
• –Produces the classification schedule — every account's current classification, the DPD basis for classification, and the change from the prior period's classification (new NPL, upgrade, no change). The schedule is the authorised official's review document before sign-off.

INVOKED WHEN: NPL classification schedule is finalised and provisioning requirements need to be computed

• –Computes expected credit loss provisions under FRS 109 (Singapore's equivalent of IFRS 9) for each classified account — Stage 1, Stage 2, and Stage 3 ECL. MAS loan classification standards (including MAS Notices on asset classification and provisioning) govern NPL identification and reporting; provisioning is driven by the ECL model rather than IRACP-style fixed percentage schedules. The agent does not apply judgment beyond the approved FRS 109 ECL model and institution policy.
• –For secured accounts, reads the current security valuation from the security valuation store and computes the net unsecured exposure (outstanding balance minus current security value) — because the MAS loan classification standards provisioning rate applies to the unsecured portion, and the provisioning requirement for a secured NPL with adequate collateral is materially lower than for an unsecured one.
• –Computes the aggregate provisioning requirement and compares it to the current provisioning balance on the general ledger — identifying the provision shortfall or surplus. Where the required provision exceeds the current provision, flags the shortfall for the CFO to authorise a GL provisioning entry.

INVOKED WHEN: quarterly board compliance reporting cycle or MAS / Central Bank regulatory submission is due

• –Produces the formal MAS loan classification standards compliance report: NPL ratios (Gross NPL, Net NPL) by portfolio segment and product, movement in NPL during the period (fresh NPLs, upgrades, write-offs, recoveries), provisioning coverage ratio, and a compliance note confirming that classification and provisioning have been applied in accordance with MAS Notices on asset classification and provisioning.
• –Tracks changes in MAS Notices through the regulatory corpus — if MAS amends classification or provisioning requirements, the agent flags the change and updates the computation methodology before the next month-end run. MAS loan classification standards compliance is only as current as the regulatory corpus.