Regulatory Alerts2015-08-25
Regulation on Capital Adequacy
Issued by the Monetary Authority of Maldives (MMA) under the Banking Act, this regulation mandates that all licensed banks maintain minimum capital buffers and risk-based ratios to safeguard depositors and ensure financial stability. It establishes baseline capital thresholds of 150 million Maldivian Rufiyaa for domestic banks and 60 million for foreign branches, while enforcing minimum leverage, Tier 1, and total risk-based capital ratios of 5.0%, 6.0%, and 12.0% respectively, with provisions for higher requirements based on individual risk profiles. The framework aligns with Basel II standards by defining eligible Tier 1 and Tier 2 capital, prescribing standardized risk weights for balance-sheet and off-balance-sheet exposures, and classifying institutions into five supervisory categories that trigger escalating corrective measures for non-compliance.