Regulatory Alerts2021-09-03 | BSD/DIR/PUB/14/063BASEL III Implementation by Deposit Money Banks in Nigeria
The Central Bank of Nigeria (CBN) announces the implementation of Basel III guidelines for banks, previously delayed due to the COVID-19 pandemic. The guidelines, accessible on the CBN website, will undergo a parallel run from November 2021 for an initial period of six months, with banks submitting monthly returns. The Basel III guidelines will run concurrently with existing Basel II guidelines during this period.
CENTRAL BANK OF NIGERIA Banking Supervision Department Central Business District P.M.B. 0187 Garki, Abuja.
09-462-36401 Tel:.
September 2, 2021 BSD/DIR/PUB/LAB/14/063 LETTER TO ALL BANKS BASEL III IMPLEMENTATION BY DEPOSIT MONEY BANKS IN NIGERIA You will recall that the Central Bank of Nigeria (CBN) had completed the development of guidelines for Basel III implementation by banks in 2020. However, due to the outbreak of the COVID-19 pandemic, the implementation was suspended to minimize the regulatory compliance burden on the banks. Following the gradual global economic recovery, the CBN hereby releases the underlisted Basel III Guidelines/Reporting Templates for implementation:
| S/N | Guidelines | Reporting Templates | |||||
|---|---|---|---|---|---|---|---|
| 1 | Guidelines | on | Regulatory | Reporting Template for Group Capital | |||
| Capital | Adequacy (TR-GCAR) | ||||||
| Reporting Template for Solo Capital | |||||||
| Adequacy (TR-SCAR) | |||||||
| 2 | Guidelines on Leverage Ratio | Reporting | Templates for Leverage | ||||
| (LeR) | Ratio (TR-LeR) | ||||||
| 3 | Guidelines | on | Liquidity | Reporting | Templates | for | Liquidity |
| Coverage Ratio (LCR) | Coverage Ratio (TR-LCR) | ||||||
| 4 | Guidelines | on | Liquidity | Reporting | Templates | for | Liquidity |
| Monitoring Tools (LMT) | Monitoring Tools (TR-LMT) | ||||||
| 5 | Guidelines on Large Exposures | Reporting | Template | for | Large | ||
| (LEX) | Exposures (TR-LEX) | ||||||
| 6 | Guidelines | on Liquidity | Risk | NA | |||
| Management | and | Internal | |||||
| Liquidity Adequacy Assessment | |||||||
| Process (ILAAP) |
In addition, the Revised Guidelines on the Supervisory Review Process of Internal Capital Adequacy Assessment Process (SRP/ICAAP) are also issued herewith for adoption by banks.
The guidelines can be accessed at the CBN website: www.cbn.gov.ng .
The implementation of the Guidelines will commence with a parallel run effective from November 2021 for an initial period of six (6) months, which may be extended by another 3 months, subject to milestones achieved in the supervisory expectations.
All banks shall submit monthly returns not later than five (5) working days after the end of the preceding month, with effect from November 2021.
During the parallel run, the Basel III guidelines shall operate concurrently alongside the existing Basel II guidelines.
Subject to the successful conclusion of the parallel run, the Basel III Guidelines shall become fully effective. Finally, all banks are to note that capital add-on will be introduced in a phased manner as part of the overall supervisory process of Pillar II assessment to enhance better risk management practices and better align their capital with their risk profiles.
Yours faithfully, HARUNA B. MUSTAFA DIRECTOR OF BANKING SUPERVISION 2