Regulatory Alerts2013-12-11 | BSD/DIR/CIR/GEN/LAB/06/053Circular to all Banks and Discount Houses on the Implementation of Basel II/III in Nigeria
▅234-9-46236401 234-9-46236454 December 10, 2013 marked the issuance of guidance notes by the Central Bank of Nigeria for implementing Basel II/III in the country. These guidelines mainly specify approaches to quantifying risk-weighted assets for credit, market, and operational risks as required by Pillar I of Basel II Accord (International Convergence of Capital Measurement and Capital Standards). They outline the adoption of the standardized approach for computing capital requirements for all banks operating in Nigeria. This includes using the Standardized Approach for credit risk with unrated corporate claims, the same approach for market risk, and the Basic Indicator Approach (BIA) for operational risk. The guidance notes are to remain applicable during the period of parallel run until full adoption of Basel II in June 2014, and release additional notes on other approaches for determining regulatory capital and Basel III rules. Banks are reminded of the importance of comprehensive risk management policies and processes to effectively identify, measure, monitor, and control their risk exposures and comply with the Basel II Pillar 3 disclosure requirements.