Regulatory Alerts2021-07-22
Treatment of Accounting Provisions for Capital Adequacy Purposes
The Central Bank of Seychelles issues interim guidance requiring banks to treat IFRS 9 Stage 1 accounting provisions as general provisions for capital adequacy calculations. Institutions may include the higher of these Stage 1 or existing regulatory general provisions in Tier 2 capital, subject to a 1.25 percent limit on risk-adjusted assets, while continuing to net off specific provisions from outstanding exposures. This framework takes effect for July 2021 reporting periods and aligns local capital adequacy ratios with Basel Committee standards until longer-term transitional arrangements are finalized.
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