Basel Capital Requirements


Basel Capital Requirements:

Prior to September 2016, banks were required to gradually meet the following set of target capital ratios (including a 2.5% capital conservation buffer):

  • Min CET1 (5.5%) + Capital Conservation Buffer ≥ 8 %
  • Min T1C (7.5%) + Capital Conservation Buffer ≥ 10%
  • Min TC (9.5%) + Capital Conservation Buffer ≥ 12%

 

In September 2016, BDL issued intermediary circular No. 436 that increased the set of target capital ratios to be met by banks gradually till the end of 2018 and that required banks to build-up a Capital Conservation Buffer of 4.5% of RWA (instead of 2.5% of RWA) above the minimum capital requirements. Accordingly, the new set of target capital ratios is as follows:

  • Min CET1 (5.5%) + Capital Conservation Buffer ≥ 10% (end of 2018)
  • Min T1C (8.5%) + Capital Conservation Buffer ≥ 13% (end of 2018)
  • Min TC (10.5%) + Capital Conservation Buffer ≥ 15% (end of 2018)