Regulatory Alerts2023-09-21
Central Bank of Libya Circular 14/2023: Guiding Principles for the General Risk Management Framework for Islamic Banks
The Central Bank of Libya issued Circular 14/2023 to establish the General Risk Management Framework for Islamic banks, partially transitioning banks, and non-bank financial institutions under its supervision. The directive mandates the implementation of comprehensive risk identification, measurement, monitoring, and reporting procedures aligned with Islamic Financial Services Board (IFSB) standards, requiring clear governance roles for boards of directors, Sharia supervisory boards, and executive management. It further requires banks to maintain independent risk management units, adopt robust internal controls and contingency planning, and ensure timely disclosure of risk exposures to comply with regulatory capital and governance requirements.