Regulatory Alerts2020-04-22
Regulation Regarding Accounting Provisions and Capital Requirements - Transitional Arrangements
The Central Bank of the UAE issued Decision No. 49/3/2020 to implement a Prudential Filter allowing banks to add back increases in IFRS 9 provisions to regulatory capital. This measure aims to mitigate the financial impact of the COVID-19 pandemic by permitting a phased addition of provisions over a five-year transition period from 2020 to 2024. The regulation specifies declining annual add-back percentages, starting at 100% in 2020 and reducing to 25% by 2024, based on the difference between provisions as of December 31, 2019, and subsequent reporting dates.
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