Regulatory Alerts2013-05-09
Credit Risk Guidelines
The Reserve Bank of Malawi issued these guidelines to require all domestic banks to adopt the Basel II Standardised Approach for measuring credit risk and calculating capital charges. The document establishes eligibility criteria for external credit assessment institutions, assigns specific risk weights across eleven distinct exposure portfolios, and defines capital requirements for off-balance sheet items and credit risk mitigation techniques. Banks must apply these standardized conversion factors and risk weights to their exposures, ensuring consistent capital adequacy reporting under the Financial Services Act 2010.
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