Regulatory Alerts2025-06-10
Regulation on Transactions with Related Persons, 2016
The Central Bank of Somalia issued this 2016 regulation to govern financial exposures and transactions between licensed banks and their related persons, including directors, officers, shareholders, and affiliated entities. The rules mandate arm’s-length pricing, require collateral covering at least 120 percent of exposure values, and impose aggregate capital limits of 20 percent for general related persons, 1 percent for non-executive directors, and up to 300 percent of annual salary for housing credits. Banks must implement board-approved policies, secure advance director approval with proper disclosure and recusal, maintain rigorous recordkeeping, and submit quarterly compliance reports to the Central Bank.
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