Regulatory Alerts2021-08-24
Circular on Regulatory Treatment of Accounting Provisions – Interim Approach and Transitional Arrangement
The Bank of Botswana mandates an interim regulatory framework for banks adopting IFRS 9, preserving pre-implementation distinctions between general and specific provisions while mapping expected credit loss stages accordingly. Banks must apply a three-year straight-line amortization to transitional "new" provisions against Common Equity Tier 1 capital, though they may elect immediate full deduction upon written notification. Concurrently, institutions must adjust deferred tax assets and credit risk exposure calculations, rebuild capital incrementally, and submit quarterly Pillar 3 disclosures comparing transitional and fully loaded capital ratios.
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