New regulation from BRSA on risk weighting for commercial loans

The BRSA has made changes to the calculation of capital adequacy ratios. According to the announcement on the BRSA's website, changes have been made to the calculation of standard capital adequacy ratios in accordance with the "Regulation on the Measurement and Assessment of Capital Adequacy" for banks.

Accordingly, the application of a 200 percent risk weight applied when using the standard approach for commercial cash loans, as well as the high risk weight applications calculated by taking into account the increase rate in the standard approach applied when using internal ratings-based approaches, have been terminated.

According to the change, while it was decided to apply the risk weights determined in the regulation to these loans, including those currently in use, it was decided that the practice of using the Central Bank of the Republic of Turkey (CBRT) foreign exchange buying rate of June 26, 2023, when calculating the amount subject to credit risk for monetary assets and non-monetary assets—excluding items in foreign currency measured at historical cost—valued in accordance with Turkish Accounting Standards and their related specific provision amounts, will be continued by using the CBRT foreign exchange buying rate of June 28, 2024, effective from January 1, 2025, until a contrary Board Decision is taken.

News Source: 12punto