Regulatory Alerts2016-01-01
Financial Institutions (Lending Limits) Regulations, 2016
Issued by the Governor of the Central Bank of Lesotho, these regulations establish comprehensive lending limits for licensed banks to mitigate concentrated risk and ensure financial stability. Banks must cap direct or indirect exposures at twenty-five percent for single borrowers and related parties, ten percent for individual related parties, and one percent for unsecured director loans, while maintaining a total large exposure ceiling of eight hundred percent of core capital. The regulations mandate quarterly reporting of top exposures and related-party transactions, require sound credit risk management systems, and empower the Commissioner to enforce remedial sanctions for non-compliance.
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