October 05, 2018

MAS updated Notice 637 on risk-based capital adequacy requirements for banks incorporated in Singapore. The Notice establishes the minimum capital adequacy ratios for a reporting bank and the methodology a reporting bank shall use for calculating these ratios (Pillar 1). The revised Notice 637 will be effective from October 08, 2018.

The MAS Notice 637 provides a range of approaches for calculating regulatory capital requirements; however, a reporting bank should adopt the approaches that are commensurate with the complexity and sophistication of its businesses and operations. a reporting bank is also encouraged to move toward the risk management practices in the more advanced approaches, even though it may not be ready to adopt them for the purpose of calculating its regulatory capital requirements. In addition to complying with the minimum regulatory capital requirements in this Notice, a reporting bank shall consider whether it has adequate capital to cover its exposure to all risks. This Notice also sets out the following:

  • MAS expectations in respect of the internal capital adequacy assessment process of a reporting bank under the supervisory review process (Pillar 2)
  • Minimum disclosure requirements for a reporting bank in relation to its capital adequacy, with a view to enhancing market discipline (Pillar 3)
  • Data submission and disclosure requirements for assessing global systemically important banks

 

Effective Date: October 08, 2018

 

Keywords: Asia Pacific, Singapore, Banking, Notice 637, Capital Adequacy, Basel III, MAS 

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