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    BOM Publishes Several Regulatory Updates in June 2021

    June 28, 2021

    The Bank of Mauritius (BOM) published guidelines on the issuance of sustainable bonds, on the scope of application of Basel III and eligible capital, for the computation of debt-to-income ratio for residential property loans. Also, BOM conducted an assessment of the domestic systemically important banks (D-SIBs) in June 2021, designating five banks as systemically important: The Mauritius Commercial Bank Ltd, SBM Bank (Mauritius) Ltd, Barclays Bank Mauritius Limited (now known as Absa Bank Mauritius Limited), The Hongkong and Shanghai Banking Corporation Limited, and AfrAsia Bank Limited. The same banks had been identified as D-SIBs in the previous assessment that was conducted in January 2020. In another update, BOM has extended certain relief measures taken in the context of the COVID-19 pandemic.

     To continue to provide ongoing assistance to Mauritian businesses across all economic sectors, households, and individuals, BOM has extended, till June 30, 2022, the:

    • moratorium on loans granted to economic operators, small and medium enterprises, households, and individuals impacted by COVID-19. 
    • Special Relief Amount facility of MUR 5.0 billion made available to banks to help meet cash flow and working capital requirements of economic operators directly impacted by COVID-19. Disbursement will continue to be effected through commercial banks and interest rate on these advances to impacted economic operators remains capped at the fixed rate of 1.5% per annum.
    • reduction of the Cash Reserve Ratio applicable to commercial banks from 9% to 8%  to further support banks to assist businesses that are being impacted by COVID-19.

    The following are the key highlights of the recently published guidelines:

    • The guideline on scope of application of Basel III and eligible capital sets out the rules text and timelines to implement some of the elements related to the strengthening of the capital framework. It also lays down the transitional arrangements for implementing certain elements of the Basel III capital framework as well as the limits and minima of the different components of capital. The revised guideline shall come into effect on June 28, 2021.
    • The guideline on the computation of debt-to-income ratio for residential property loans sets out procedures to be followed by banks to determine repayment capacity of borrowers when granting credit facilities for the purchase or construction of residential properties in Mauritius. The revised guideline shall come into effect on June 17, 2021.
    • The guideline on issuance of sustainable bonds in Mauritius covers the requirements and process for the issuance of sustainable bonds and for the listing of these bonds on Exchanges licensed in Mauritius while seeking to ensure the integrity of the sustainable financing ecosystem in Mauritius and to prevent greenwashing. 

     

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    Keywords: Middle East and Africa, Mauritius, Banking, ESG, COVID-19, Regulatory Capital, Sustainable Bonds, D-SIBs, Credit Risk, Debt to Income Ratio, DTI, RRE, Basel, D-SIBs, Greenwashing, BOM

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