Regulatory Alerts2011-02-15
SAMA Announcement on Basel II and III Implementation Plans for 2011
SAMA outlines its 2011 roadmap for implementing Basel II and III, requiring banks to designate at least two senior representatives per committee by late February 2011 and maintain dedicated project leaders to coordinate regulatory compliance. The central bank will establish specialized working groups to advance key initiatives, including ICAAP refinements, internal ratings-based credit risk transitions, and new capital leverage and liquidity coverage ratio reporting. These committees are scheduled to commence operations in the second quarter of 2011, supported by targeted seminars and ongoing alignment with Basel Committee on Banking Supervision proposals.
�aubi �rabian ;fflonetarp �gencp Banking Supervision Dept. ,,---- During 2011, SAMA will continue to discuss with the Banks the implementation of Basel II projects and some new initiatives under Basel Ill. The main areas of work are as follows:
- Further refinements of the ICAAP process in light of Basel Ill.
- Follow up on Banks previously submitted plans for transition to the IRB approaches for credit risk.
- Finalization of Prudential Returns and Guidance notes for IRB Approaches
- Finalization of the Prudential Return on Capital Leverage Ratio and start of the monitoring process.
- Finalization of the Prudential Returns for Liquidity Coverage Ratio and monitoring will start in 2012. SAMA envisages forming a number of working groups to advance the implementation of different aspects of Basel Ill. These are listed in Attachment 2. All Banks are required to designate at least ·2 senior persons to each Committee by 28 February 2011. Their names and contact telephone numbers should be forwarded to Mr. Fahd Al-Mufarrij, Director of Banking Supervision. We expect these Committees to commence work once further details on Basel Ill proposals are issued by the BCBS, and SAMA has assessed their relevance and implications for the Saudi Banking system. We expect the working groups to commence their work in the 2 nd quarter of 2011. In order to ensure a good understanding of Basel Ill in the Banking sector, SAMA representatives have made presentations to Managing Director of the Banks in the MD's Committee and to relevant senior managers and Basie II Team members in December 2010. SAMA may organize additional seminars during 2011 to deal with specific areas. Banks will be notified about the specific dates and details of such seminars in due course. Banks are advised to maintain strong Basel 11/111 teams with a designated project leader ( coordinator) to plan and execute the implementation of Basel Ill. The Project Leader should have overall responsibility, with the work delegated to the team members. The Project Leader should also act as the liaison person with SAMA. ��(� Dr. Abdulrahman Al Kalaf Deputy Governor for Technical Affairs 2 P. 0. Box 2992 - Riyadh 11169, Saudi Arabia - Tel.: 01-463 3000 - Telex 404390 SJ - Fax 01-466 2119