2017-09-18

Basel III Internal Rating Based Approaches (IRB) for Credit Risk

The Saudi Arabian Monetary Agency’s Banking Supervision Department mandates licensed financial institutions to implement the Internal Rating Based (IRB) approaches for credit risk. This directive operationalizes Basel III standards by requiring banks to calculate regulatory capital using internally derived probability of default and loss given default parameters. Institutions must integrate these IRB methodologies into their risk management frameworks to ensure accurate capital adequacy assessments and consistent regulatory compliance.

Saudi Arabia

Saudi Central Bank

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�aubi �rabian ;fflonetarp �gencp Banking Supervision Dept. Alwaleed Alsheikh Director of Banking Supervision P. 0. Box 2992 - Riyadh 11169, Saudi Arabia - Tel.: 01-463 3000 - Telex 404390 SJ - Fax 01-466 2119