Regulatory Alerts2025-11-07
Risk-Based Capital Adequacy Requirements for Banks Directive No. SBB/95/2025
The National Bank of Ethiopia has issued Directive No. SBB/95/2025 to establish comprehensive risk-based capital adequacy requirements for all licensed banks operating in Ethiopia, both individually and on a consolidated basis. The directive defines eligible capital across Common Equity Tier 1, Additional Tier 1, and Tier 2 categories while mandating specific capital charges for credit, market, and operational risks to maintain a minimum 11 percent capital ratio. It assigns primary compliance responsibility to bank boards of directors for maintaining capital management strategies and outlines reporting obligations, administrative sanctions, and a structured transition period to fully integrate Basel II and III standards.
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