Regulatory Alerts2025-07-01
Circular C3-2025 on Granularity Criteria
The Prudential Authority issued Circular C3-2025 to clarify the granularity criteria for retail exposures, requiring banks to apply a 0.2 per cent aggregate exposure threshold on a consolidated basis after adjusting for credit conversion factors and excluding residential mortgages. Exposures exceeding this limit but remaining under R12.5 million retain retail classification while attracting a 100 per cent risk weight, whereas those meeting the threshold qualify for the preferential 75 per cent rate. Institutions must implement these consolidated calculations for regulatory reporting and return a duly signed acknowledgement of receipt to the Prudential Authority.
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