Regulatory Alerts2013-04-30
Capital Framework for South Africa Based on the Basel III Framework
The South African Reserve Bank issued Directive 5/2013 to implement the Basel III capital framework, establishing minimum capital ratios and phased buffer requirements for all banks operating in South Africa. The directive sets the systemic risk capital requirement at 1.5 percent initially, rising to 2.0 percent, while capping the combined systemic risk and domestic systemically important bank higher loss absorbency requirement at 3.5 percent and establishing a maximum total capital adequacy threshold of 14 percent by January 2019. Banks must maintain discretionary capital buffers above minimums, face automatic restrictions on dividend distributions if capital ratios fall below prescribed levels, and keep bank-specific supervisory capital requirements confidential.