CBE Extends Exemption of Minimum Capital Requirements for Risk-Weighted Assets

The Central Bank of Egypt (CBE) decided to extend the exemption for banks from maintaining the debt-to-equity ratio for their Risk Weighted Assets (RWA), which sets minimum capital requirements, for the 50 largest clients and related parties until the end of December 2021.

CBE announced on Wednesday that this move comes in light of its measure to mitigate the repercussions of the coronavirus, with the aim of continuing to support banks to play their role in supporting various economic sectors.

On the other hand, the central bank pointed to the continuation of implementing the Capital Adequacy Ratio (CAR) for a financial institution, Inpiduals, within the framework of the Basel II Accord.

In early 2016, the Bank had issued instructions, which required the implementation of the Risk-weighted asset (RWA) of up to 200% if the equity investments to the biggest 50 clients exceed 50% of the credit portfolio, and 300% in the event that the credit exceeds 70% of the total portfolio, setting minimum capital requirements for banks in mortgages, securities, and debt.