BOT revised the eligibility criteria for financial instruments to be qualified as banking capital, in line with the international standards. The amendment aims to support the capital funding of banks via issuance of financial instruments qualified as banking capital. Therefore, BOT is amending criteria for inclusion of financial instruments in Tier 1 capital (Additional tier 1) and Tier 2 capital. The amendments shall come into force from the day following the date of its publication in the Government Gazette.
BOT has amended the regulations on Additional Tier1 (AT1) capital instrument so that issuance banks are allowed to pay interests or other returns to holders without prior approval from BOT, provided that BIS ratio of the bank is higher than the specified ratio as prescribed by BOT. Moreover, this amendment has revoked the clause requiring banks to have the rights to postpone the schedule for payment of interests for Tier 2 capital instrument. In addition, this regulation had been revised to accommodate the implementation of the new Thai financial reporting standard on financial instruments (TFRS 9), which came into effect from January 01, 2020 onward.
BOT has issued the regulations on capital supervision under the Basel III framework, based on the BCBS guidelines. The regulations aim to ensure that locally incorporated banks sufficiently hold good quality capital that can absorb losses during normal and stressed periods and to preserve the stability of the overall financial system. The amendments shall apply to all commercial banks according to the law on financial institution business exception of foreign bank branches.
Effective Date: Government Gazette + 1 Day
Keywords: Asia Pacific, Thailand, Banking, Regulatory Capital, Financial Instruments, TFRS 9, IFRS 9, Additional Tier 1 Capital, Tier 2 Capital, Basel, BOT
Previous ArticleBCB to Start First Cycle of Regulatory Sandbox
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards
The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.
The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.
In a response to the questions posed by a member of the European Parliament, the President Christine Lagarde highlighted the commitment of the European Central Bank (ECB) to an ambitious climate-related action plan along with a roadmap, which was published in July 2021.
The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.
The French Prudential Control and Resolution Authority (ACPR) published the corrective version of the RUBA taxonomy Version 1.0.1, which will come into force from the decree of January 31, 2022.
The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.