Regulatory Alerts2016-04-25
Directive on the Revised International Convergence of Capital Measurement and Capital Standards (Basel II)
The Bank of Botswana issued this directive to implement the Basel II framework, establishing revised capital measurement and minimum regulatory capital standards for licensed banks. It mandates a minimum capital adequacy ratio of 15 percent against total risk-weighted assets and redefines the regulatory capital structure into Tier I (going-concern) and Tier II (gone-concern) components with strict classification criteria. The directive supersedes the Basel I framework, abolishes previous capital limits, and details comprehensive risk-weighting methodologies for credit, market, and operational risks effective January 1, 2016.
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