Regulatory Alerts2013-08-20
C6/2013: Matters related to conditions for the issue of instruments or shares, the proceeds of which rank as Tier 2 capital
The Office of the Registrar of Banks issued Circular 6/2013 to clarify the calculation of concomitant amounts eligible for inclusion in Tier 2 capital under the Regulations relating to Banks effective from 1 January 2013. The circular mandates that instruments with a minimum original maturity of more than five years must undergo a linear amortization, reducing the qualifying capital by 20 percent annually starting in the fifth year prior to maturity until it reaches zero. This regulatory requirement ensures compliance with specific capital adequacy standards by systematically phasing out the contribution of these instruments as they approach their maturity date.
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