Regulatory Alerts2025-01-01
Banking and Financial Services (Large Exposures) Rules 2025
The Bank of Zambia has issued the Banking and Financial Services (Large Exposures) Rules, 2025 to cap institutional lending risks by limiting single-counterparty exposures to twenty-five percent and aggregate large exposures to six hundred percent of regulatory capital. Financial institutions must secure board approval for exposures exceeding ten percent of capital, apply eligible credit risk mitigation techniques, and submit prescribed reports while benefiting from exemptions for government securities and listed multilateral banks. The regulations replace the 1996 framework, require existing non-compliant loans to be brought into compliance within one year, and enforce daily administrative penalties of up to two hundred thousand penalty units alongside potential director removal for contraventions.