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7.4 Minimum Standards for the Use of Loss Data Under the Standardized Approach
No: 44047144
Date(g): 27/12/2022 | Date(h): 4/6/1444
Status: In-Force
7.4.1
The Banks with a BI greater than SAR 4.46 billion are required to use loss data as a direct input into the operational risk capital calculations. Banks, which do not meet the loss data standards, as mentioned in section 6 to 10 of this document, are required to hold capital that is at a minimum equal to 100% of the BIC. In such cases, SAMA may require the bank to apply an ILM which is greater than 1. The exclusion of internal loss data due to non-compliance with the loss data standards, and the application of any resulting multipliers, must be publicly disclosed in Pillar 3.
7.4.2
The soundness of data collection and the quality and integrity of the data are crucial to generating capital outcomes aligned with the bank’s operational loss exposure. The qualitative requirements for loss data collection are outlined in sections 8 and 9.
