Question ID:
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Operational risk
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Regulation (EU) 2021/451 – ITS on supervisory reporting of institutions
Disclose name of institution / entity:
Type of submitter:
Credit institution
Subject Matter:
Operational Risk - Refund of interest and fees

Do we have to report refunds to customers in combination with incorrectly overchared interest/fee in COREP 17.01? And if so, in which of the following situations:

1. refund by the bank within less than 5 days
2. refund by the bank within a quarter (before the quarterly financial statement is prepared)
3. refund by the bank within one year (before the annual balance sheet and income statement are prepared)
4. refund by the bank after several years

The timing of the outflow of the refund to the customer depends in each case on the time at which the error is identified.

Background on the question:

In the EBA Q&A 2020_5261 dated 15.10.2021, it was confirmed on the basis of guideline 451/2021 that loss events in the gross loss are only to be reported as soon as they are booked and therefore recognized in the income statements. 

How should the disclosure in the income statements be interpreted. Are overcharged or double-charged loan interest or fees part of this definition and do they have to be considered in the operational risk management and the gross loss in the COREP reporting? The cash outflow is therefore offset by a preceding (at least partially unjustified) cash inflow. The cash outflow is fully covered by the preceding cash inflow (adjustment entry on the same revenue account).

Date of submission:
Question under review
Answer prepared by:
Answer prepared by the EBA.