Regulatory Alerts2018-06-06
Notice No. 5/GBM/2018, June 6 – Establishes Prudential Limits on Risk Concentration Assumed by Credit Institutions with Their Counterparties
The Bank of Mozambique issued Notice No. 5/GBM/2018 to establish prudential limits on risk concentration assumed by credit institutions with their counterparties. The regulation mandates that domestic and foreign-branch credit institutions cap single counterparty exposures at 25% of Tier 1 Capital, limit correlated entity and intragroup risks to 25% (financial) or 10% (non-financial), and aggregate significant risks to six times Tier 1 Capital. It further defines risk concentration mitigation criteria, reporting obligations, and a six-month adaptation period for compliance, with provisions for exceptional extensions and specific risk exemptions.
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