Regulatory Alerts2006-10-13
INSTRUCTION N° 001/06-CSBF on the Solvency Ratio of Credit Institutions
The Banking and Financial Supervision Commission (CSBF) of Madagascar issued Instruction No. 001/06-CSBF to mandate a minimum 8% solvency ratio for all authorized credit institutions, calculated on consolidated bases where applicable. The directive establishes detailed risk-weighting methodologies for on-balance sheet assets and off-balance sheet commitments, incorporating fixed percentages, ECA-based sovereign ratings, and correspondent bank credit ratings. It further specifies deduction rules for own funds, provisional treatment for doubtful claims, and enforcement mechanisms including corrective measures and sanctions for non-compliance.
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