Regulatory Alerts2016-04-18
Directive 1/2016: Exposure Limits for Classifying SME Deposits and Credit Exposures
The Office of the Registrar of Banks issued Directive 1/2016 to revise the threshold amounts used by South African banks for classifying deposits and credit exposures as retail or SME retail. Effective 1 July 2016, the directive increases the maximum aggregate exposure limit for individual persons and small businesses from R7.5 million to R12.5 million across multiple regulatory provisions, while maintaining the R1 million limit for qualifying revolving retail credit. This adjustment aligns domestic capital and liquidity risk frameworks with Basel II and III standards by replacing fixed regulatory thresholds with enabling provisions that allow the Registrar to specify limits in writing to reflect current market conditions.
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