Regulatory Alerts2014-04-24
Added · Updated
Ordinance No 7 of the BNB on Organisation and Risk Management of Banks
The Ordinance establishes requirements for the organization and risk management of banks, mandating that supervisory and management boards approve risk strategies and ensure adequate resources for material risks. Banks must maintain an independent risk management function with a qualified head who reports directly to the supervisory board, while significant banks are required to establish a risk committee composed of at least three independent members. The document sets specific criteria for managing credit, market, operational, and leverage risks, including the use of internal methodologies for credit assessment and contingency plans for business continuity. It further outlines the supervisory review and evaluation process, requiring banks to report internal capital calculations for benchmarking and subjecting them to assessments of their governance, risk profiles, and capital adequacy.
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