HomeNewsProgress on Basel II

Progress on Basel II

-

Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono says significant progress has been made by banking institutions in preparation for the launch of Basel II.

Basel II is the commonly used term for the new framework for capital requirements for banks issued by Basel committee on banking supervision.

It seeks to create an international standard that banking regulators can use when creating regulations about how much capital banks need to put aside to guard against the types of financial and operational risks banks face.

Said Gono: “The Reserve Bank will continue to facilitate smooth implementation of banking institutions. Basel II plans as well as provides necessary guidance through seminars and workshops.”

Financial institutions are expected to have complied with Basel II by January 2013 and no bank would be using Basel II.

According to the rules the greater the risk to which the bank is exposed, the greater the amount of capital the bank needs to hold to safeguard its solvency and overall economic stability.

Gono said the central bank has recalibrated the regime of provisions for loan losses to bring them in line with the RBZ’s 10-tier Supervisory Rating System contained in Guideline No 1-2011/BSD: Technical Guidance on the Implementation of the Revised Capital Adequacy Framework in Zimbabwe.

The revised provisioning levels, which become operational with effect from March 1, 2012 are meant to ensure that loan loss provisions remain sufficient to absorb expected losses.

Recent Posts

Stories you will enjoy

Recommended reading