RegAlert2014-03-31
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BRPD Circular No. 07: Implementation of Basel-III in Bangladesh
Bangladesh Bank finalizes an Action Plan and Roadmap for the implementation of the Basel III regulatory framework, requiring all scheduled banks in Bangladesh to prepare for compliance based on a Quantitative Impact Study. The plan mandates the issuance of specific guidelines by June 2014 and sets July 2014 as the commencement date for the implementation process, with full implementation initiated by January 2019. The document establishes phase-in arrangements for capital ratios, including Minimum Common Equity Tier-1 (CET-1) Capital Ratio starting at 4.00% in July 2014 and rising to 4.50% by December 2015, alongside a Capital Conservation Buffer that reaches 2.50% by 2019. It also specifies deadlines for liquidity metrics, such as the Liquidity Coverage Ratio test from June 2014 to June 2015, and notes that the Countercyclical Capital Buffer regime will become effective from January 2016.
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Banking Regulation and Policy Department Bangladesh Bank Head Office Dhaka March 31, 2014 BRPD Circular No- 07 Date: ---------------------- Chaitra 16, 1420 Chief Executives All Scheduled Banks in Bangladesh Dear Sir, Implementation of Basel-III in Bangladesh As you are aware, Basel III is a new regulatory framework recommended by Basel Committee. Following the framework, Bangladesh Bank has conducted Quantitative Impact Study (QIS) to assess the preparedness of banks for implementing Basel III in Bangladesh. Based on the findings of the last QIS an Action Plan/Roadmap (Annexure-1) is finalized with the approval of the competent authority. The Action Plan/Roadmap is enclosed herewith for your internal plan and gearing up the efforts for implementing Basel III. Please acknowledge receipt. Yours Sincerely, SD/- (Md. Nasiruzzaman) General Manager Phone: 9530252 Encl:-As stated above
Annexure-1
Action Plan/Roadmap
Action Deadline
Issuance of Guidelines June 2014 Capacity Building of Banks June-Dec 2014 Commencement of Basel III Implementation process July 2014 Initiation of Full Implementation of Basel III January 2019 Phase-in Arrangements The phase-in arrangements for Basel III implementation will be as follows:
July 2014 2015 2016 2017 2018 2019 Minimum Common Equity Tier-1 (CET-1) Capital Ratio 4.00% 4.50% 4.50% 4.50% 4.50% 4.50% Capital Conservation Buffer - - 0.625% 1.25% 1.875% 2.50% Minimum CET-1 plus Capital Conservation Buffer 4.00% 4. 5% 5.125% 5.75% 6.375% 7.00% Minimum T-1 Capital Ratio 5.00% 5.50% 5.50% 6.00% 6.00% 6.00% Minimum Total Capital Ratio 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% Minimum Total Capital plus Capital Conservation Buffer 10.00% 10.00% 10.625% 11.25% 11.875% 12.50% Phase-in of deductions from CET1 Not Applicable Phase-in of deductions from Tier 2 Revaluation Reserve (RR) RR for Fixed Assets 20% 40% 60% 80% 100% 100% RR for Securities 20% 40% 60% 80% 100% 100% RR for Equity Securities - 50% 100% 100% 100% 100% Leverage Ratio 3% 3% 3% 3% Readjustment Migration to Pillar 1 Liquidity Coverage Ratio June 2014 to June 2015 on test basis ≥100% (From Sep.) ≥100% ≥100% ≥100% ≥100% Net Stable Funding Ratio
100%
(From Sep.) >100% >100% >100% >100% Countercyclical Capital Buffer - - Countercyclical capital buffer regime will be effective from Jan 2016
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Lineage: Amended
Source: Bangladesh Bank — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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