Regulatory Alerts2019-04-12 | BSD/DIR/GEN/LAB/12/011/3Guidance Notes on Regulatory Capital for Non-Interest Financial Institutions in Nigeria
The Central Bank of Nigeria's Guidance Notes outline regulatory capital requirements for non-interest financial institutions (NIFIs), including Islamic banks and windows within conventional banks. The notes define eligible capital components, such as Tier 1 and Tier 2 capital, and specify criteria for their inclusion. Adjustments and deductions, such as minority interests, unrealized gains/losses, and intangible assets, are outlined to ensure a conservative calculation of regulatory capital. The document also addresses the treatment of profit-sharing investment accounts, profit equalization reserves, and investment risk reserves. NIFIs are required to maintain a minimum capital adequacy ratio, with separate calculations for the standard formula approach and the supervisory discretion formula approach.