Banks Act: Regulation 23 Credit Risk Amendments Gazetted
Brought to you by SA Legal Academy: National Treasury has gazetted substantive amendments to the regulations issued under the Banks Act, No. 94 of 1990, specifically regarding the measurement of credit risk exposure.
In terms of the Banks Act, No. 94 of 1990, the Minister of Finance has amended Regulation 23 of the Regulations Relating to Banks. These amendments are set to come into operation on 1 July 2025. The notice substitutes extensive sections of Regulation 23, which dictates the minimum requirements with which a bank must comply when calculating and measuring its exposure to credit risk.
The revised Regulation 23 framework addresses the technical parameters for risk-weighted assets and the methodologies used to determine capital adequacy in relation to credit portfolios. Banks will be required to transition their measurement systems to the new standards over the coming year to ensure compliance by the effective date.
What this means for you, your business, or your clients
- For yourself: Maintain professional competence by reviewing the technical changes to credit risk weighting methodologies to ensure accurate advisory or audit services.
- For your business: Compliance officers and risk managers at registered banks must initiate a gap analysis between current credit risk measurement models and the substituted requirements of Regulation 23 before the 1 July 2025 deadline.
- For your clients: Banking clients will need to be informed of potential shifts in credit risk appetite or capital allocation strategies that may result from the revised measurement methodologies.
Originally published at https://legalacademy.co.za/news/read/banks-act-regulations-credit-risk-exposure-amendments-gazetted