Regulatory Alerts2019-01-24
Financial Services (Large Exposures and Credit Concentration Limits for Banks) Directive, 2015
Issued by the Registrar of Financial Institutions under the Financial Services Act, 2010, this directive establishes binding limits on banks' large exposures and credit concentrations to ensure sound credit diversification. It mandates that individual credit concentrations remain within twenty-five percent of a bank’s core capital, while aggregate exposures cannot exceed four hundred percent, requiring boards to adopt and annually review written credit policies. Banks must submit quarterly reports detailing these exposures, obtain prior Registrar approval for concentrations exceeding the standard limit unless exempted, and face monetary penalties of up to fifty million kwacha for non-compliance.
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