2015-06-27 | BSD/DIR/GEN/BAS/08/031/4

Guidance Notes on the Calculation of Capital Requirement for Operational Risk

The Central Bank of Nigeria outlines capital requirements for banks to manage operational risk, offering two methods: the Basic Indicator Approach (BIA) and the Standardized Approach (TSA). The BIA calculates capital requirements by multiplying a bank's gross income by a regulatory percentage, while the TSA uses separate percentages for eight business lines. Banks must adopt the BIA initially and can transition to the TSA with CBN approval. Effective operational risk management is emphasized, with boards and senior management responsible for establishing and overseeing these systems.

Nigeria

Central Bank of Nigeria

Show thumbnail