BNM Policy Document on Trade Credit Insurance and Trade Credit Takaful
BNM published a policy document sets out requirements on the offering of trade credit insurance and trade credit takaful by licensed insurers and takaful operators. The policy document comes into effect on May 03, 2019. The requirements for the recognition of trade credit insurance and trade credit takaful as credit risk mitigation are also outlined under the capital adequacy frameworks for Basel II (risk-weighted assets or RWAs) and Islamic banks (RWAs), respectively. Therefore, BNM also published updated documents on Capital Adequacy Framework (Basel II – risk-weighted assets) and Capital Adequacy Framework for Islamic banks (risk-weighted assets).
The policy document on trade credit insurance and trade credit takaful sets out the approval process and requirements on the offering of trade credit insurance by a licensed insurer and trade credit takaful by a licensed takaful operator. The document also sets out the treatment of trade credit insurance or trade credit takaful as credit risk mitigation (CRM) by a banking institution under the Capital Adequacy Framework applicable to it. These policy requirements seek to position insurance and takaful products to better meet the protection needs of businesses.
Related Links
- Notice
- Trade Credit Insurance and Trade Credit Takaful (PDF)
- Capital Adequacy Framework for Basel II (PDF)
- Capital Adequacy Framework for Islamic Banks (PDF)
Effective Date: May 03, 2019
Keywords: Asia Pacific, Malaysia, Banking, Insurance, Basel II, Capital Adequacy Framework, Risk-Weighted Assets, Trade Credit Insurance, Trade Credit Takaful, BNM
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
IFRS Foundation Publishes IFRS Taxonomy 2019Related Articles
ECB Finds Banks Unprepared for Pillar 3 Climate Risk Disclosures
The European Central Bank (ECB) published results of the 2022 supervisory assessment of climate-related and environmental risk disclosures among significant institutions (103) and a selected number of less significant institutions (28).
NCUA Assesses Credit Union Exposure to Climate-Related Physical Risks
The National Credit Union Administration (NCUA) released a Research Note that examines the exposure of credit unions to climate-related physical risks. In a related development
EBA Issues Multiple Regulatory and Reporting Updates for Banks
The European Banking Authority (EBA) is seeking comments, until July 31, 2023, on the draft Guidelines on the proposed common approach to the resubmission of historical data under the EBA reporting framework.
EC Adopts Regulation on Own Funds, Issues Other Updates
The European Commission adopted Delegated Regulations on own funds and eligible liabilities, on requirements for the internal methodology under the internal default risk model
CDP Platform to Report Plastic-Related Impact, Issues Other Updates
The Carbon Disclosure Project (CDP) announced that its global environmental disclosure platform has enabled reporting on plastic-related impact for nearly 7,000 companies worldwide
IASB to Enhance Reporting of Climate Risks, Proposes IFRS 9 Amendments
The International Accounting Standards Board (IASB) updated its work plan to enhance the reporting of climate-related risks in the financial statements,
BIS Addresses Data Gaps and Macro-Prudential Policy for Climate Risks
The Financial Stability Institute (FSI) of the Bank for International Settlements (BIS) published a brief paper that examines challenges associated with the use of macro-prudential policies to address climate-related financial risks.
FCA Sets Out Business Plan, Launches TechSprint on Greenwashing
The Financial Conduct Authority (FCA) published its business plan for 2023-24. The plan sets out details of the work planned for the next 12 months to achieve better outcomes for consumers and markets
UK Committee Sets Out Recommendations for Next Phase of Open Banking
The Joint Regulatory Oversight Committee (JROC), comprising the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) as co-chairs and the HM Treasury and the Competition and Markets Authority (CMA) as members
ECB Publishes Multiple Regulatory Updates for Banking Institutions
The European Central Bank (ECB) published the results of the 2022 climate risk stress test of the Eurosystem balance sheet,