Regulatory Alerts2021-01-01 | 23985Added · Updated
Guideline on the Management of Liquidity Risk
Financial institutions and financial holding companies under the Financial Institutions Act, 2008 must establish and maintain a robust liquidity risk management framework to ensure they can meet daily obligations and withstand stress. The Board of Directors holds ultimate responsibility for overseeing liquidity risk, including setting risk tolerance, approving strategies, and reviewing the framework annually. Senior management must implement policies, maintain management information systems, and ensure effective internal controls, including regular stress testing and a board-approved liquidity contingency plan. Systemically important financial institutions are also required to adhere to these principles.
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