Featured Product

    BoM Revises Approach to Use of ECAIs by Banks, Extends Loan Moratorium

    December 09, 2020

    BoM revised the guideline outlining its approach to the recognition process for external credit assessment institutions (ECAIs) and to the use of eligible ECAIs by banks. The standardized approach to credit risk requires banks to use credit assessments provided by ECAIs that are recognized by national supervisors as eligible for regulatory capital purposes, to determine the risk-weights on their credit exposures. This revised guideline came into effect from November 12, 2020. In a separate statement, BoM announced that the moratorium on loans and Special Relief Amount of MUR 5 billion has been extended to June 30, 2021, to further support businesses and those facing financial constraints as a result of the COVID-19 pandemic. The decision for extension of these measures has been taken in consultation with the Mauritius Bankers Association Limited.

    The guideline on recognition and use of ECAIs applies to all banks licensed under the Banking Act 2004. The guideline highlights that ECAIs can be recognized using either direct or indirect recognition method. An eligible ECAI is an entity that has been recognized by BoM to meet the eligibility criteria set out in the guideline. Only the credit assessments of eligible ECAIs shall qualify for the standardized approach to credit risk. The guideline also sets out the minimum requirements for the six eligibility criteria: objectivity, independence, international access/transparency, disclosure, resources, and credibility. BoM shall ensure that, on an ongoing basis, a recognized ECAI meets the six eligibility criteria and that the assigned risk-weights reflect the level of credit risk. BoM shall map eligible ECAI assessments to the supervisory risk-weights under the standardized approach to credit risk using the guidance provided by BCBS. Under Annex 2 of the guideline, BoM provided a list of recognized ECAIs under both the direct and indirect methods, along with the list of relevant assigned supervisory risk-weights.

     

    Related Links 

    Keywords: Middle East and Africa, Mauritius, Banking, COVID-19, Credit Risk, ECAI, Regulatory Capital, Loan Moratorium, Basel, Standardized Approach, Credit Ratings, BOM

    Featured Experts
    Related Articles
    News

    US Regulators Release Stress Test Scenarios for Banks

    The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

    February 28, 2024 WebPage Regulatory News
    News

    Asian Governments Aim for Interoperability in AI Governance Frameworks

    The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.

    February 28, 2024 WebPage Regulatory News
    News

    EBA Proposes Operational Risk Standards Under Final Basel III Package

    The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.

    February 26, 2024 WebPage Regulatory News
    News

    EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS

    The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.

    February 23, 2024 WebPage Regulatory News
    News

    ECB to Expand Climate Change Work in 2024-2025

    Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.

    February 23, 2024 WebPage Regulatory News
    News

    BIS Bulletin Examines Cognitive Limits of Large Language Models

    The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.

    January 25, 2024 WebPage Regulatory News
    News

    ECB is Conducting First Cyber Risk Stress Test for Banks

    As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.

    January 24, 2024 WebPage Regulatory News
    News

    EBA Continues Momentum Toward Strengthening Prudential Rules for Banks

    A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.

    January 24, 2024 WebPage Regulatory News
    News

    EU and UK Agencies Issue Updates on Final Basel III Rules

    The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards

    December 19, 2023 WebPage Regulatory News
    News

    Industry Agency Expects Considerable Uptake for Swiss Climate Scores

    The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.

    December 18, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8952