Regulatory Alerts2022-01-13
Added · Updated
Circular on Exceeding Regulatory Capital Limits for AT1 and T2 Instruments under Basel III
The Central Bank allows licensed banks to exceed the standard Additional Tier 1 and Tier 2 capital limits, permitting a combined total of up to 6% of risk-weighted assets. This exception is subject to obtaining prior approval from the Central Bank. The decision amends the application of Regulatory Capital Instructions under Basel III Standard No. 67/2016.
10/1/773 10 / 6 /1443 AH 13 /1 /2022 AD
Circular to Licensed Banks
Greetings,
With reference to Article (Second/3/2.3) and Article (Second/3/3.3) of the Regulatory Capital Instructions under Basel III Standard No. (67/2016) dated 31/10/2016, which relate to the maximum limits for Additional Capital (AT1) and Tier 2 (T2), it has been decided to allow banks to exceed the ratios stipulated in the aforementioned articles. This allows the total maximum limit that can be utilized within either of the aforementioned tiers (or both together) to amount to no more than 6% of assets weighted by credit, market, and operational risks at all times, subject to obtaining prior approval from the Central Bank.
Please accept our highest regards,
The Governor Dr. Adel Al-Sharkas