Regulatory Alerts2023-01-09
Added · Updated
Circular 13/2022: Instructions for Calculating Capital Adequacy for Islamic Banks
The Central Bank of Libya issued instructions for Islamic banks to calculate capital adequacy according to Islamic Financial Services Board (IFSB) standards, which are based on Basel II. Commercial banks in the Libyan banking sector must comply with these supervisory controls from March 31, 2023, with a transitional period until June 30, 2023, to submit their data. The capital adequacy ratio must be prepared quarterly and submitted to the Department of Banking and Currency Supervision. The instructions detail the calculation of eligible capital (Tier 1 and Tier 2), risk-weighted assets for financing, market, and operational risks, and introduce an alpha (α) value of 50% for assets financed by unrestricted investment accounts to account for transferred commercial risks.
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