Regulatory Alerts2024-06-12
Exposure to Related Party Directive No. SBB/88/2024
The National Bank of Ethiopia issued Directive SBB/88/2024 to regulate commercial banks' credit exposures to related parties, capping individual exposures at 15 percent and aggregate exposures at 35 percent of total capital. Banks must conduct these transactions at arm’s length, secure prior board approval for exposures exceeding Birr 15 million or posing special risks, and maintain robust internal controls alongside monthly regulatory reporting. Replacing Directive SBB/53/2012, the regulation takes effect on June 12, 2024, and grants non-compliant institutions a three-year transition period to align their excess exposures with the new prudential limits.
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