National Discretions Concerning SAMA’s Implementation of Capital Reforms Under Basel III Framework
No: 361000005773 Date(g): 3/11/2014 | Date(h): 11/1/1436 Status: In-Force The Saudi Central Bank refer to its circular # 341000015689 dated 19 December 2012 concerning its Final Guidance Document regarding Implementation of Capital reforms under Basel III Framework.
In this respect, the Basel III capital framework permits national discretions to be exercised in a number of areas for the standards to be implemented in a manner that takes into consideration local market considerations within certain parameters that ensure adherence to overall BCBS objectives.
Accordingly, the Saudi Central Bank has exercised National Discretions in many areas (see attached) which Saudi banks must take into consideration in their implementation of Basel III.
Basel III National Discretions
Para Areas of national discretion KSA 52 Consider appropriate audit, verification or review procedures Yes 61 Apply a limit lower than 0.6% to excess provisions No 78-79 FAQ 14 consolidation alternative to deduction No 80 FN 27 Permit banks to use a conservative estimate instead of look-through Yes 80 Permit banks to exclude investments made in the context of resolution Yes 84 FN 31 Permit banks to use a conservative estimate instead of look-through Yes 84 Permit banks to exclude investments made in the context of resolution Yes 99 Apply para 104 instead of 98 non-IMM CVA charge No* 121 Allow banks to use unsolicited ratings No 132 (c) Apply at solo level Yes 132 (d) Impose time limits on draw down of buffers Yes 133 Impose shorter transitional periods No 142 FN 50 Apply at solo level Yes PON Press release 1 (a) Apply Statutory approach No *Amended to Yes as per SAMA circular No. (361000021954), dated 11/2/1436 H.