BNM issues policy document on Capital Adequacy Framework (Standardise Approach for Credit Risk)

23 January 2025

On 20 November 2024, Bank Negara Malaysia issued a policy document on Capital Adequacy Framework (Standardised Approach for Credit Risk), which takes effect from 1 July 2026. The policy document sets out the regulatory requirements for banks and financial holding companies to compute capital requirement for credit risk under a standardised approach to ensure consistency. Additionally, the policy document seeks to align BNM’s capital adequacy framework with Basel III reforms and Islamic Financial Services Board standards.