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Exposure draft on Credit Risk

Release Date: 20 Jan 2017

This Exposure Draft sets out the Bank’s proposed regulatory requirements on credit risk management for licensed persons, prescribed development financial institutions and financial holding companies. The proposals seek to ensure that the Bank’s key expectations and requirements on credit risk management remain effective moving forward.

In particular, the proposals–

  • clarify and reinforce expectations and requirements on board-level governance arrangements and the risk management function, particularly within the context of credit decision-making;
  • introduce requirements to strengthen the management of exceptional credits;
  • prescribe minimum standard for credit loss estimation; and
  • enhance expectations on the management of concentration risk, country and transfer risk, as well as group-wide credit risk oversight.

The Bank invites written feedback on the proposed regulatory requirements, including suggestions on areas to be clarified and alternative proposals. The written feedback should be supported with clear rationale, accompanying evidence or illustrations, as appropriate to facilitate an effective review of this Exposure Draft.

In addition to providing general feedback, financial institutions are requested to respond to the specific questions set out throughout this Exposure Draft.

Responses must be submitted to the Bank by 31 March 2017 to the following email: pfpconsult@bnm.gov.my.

Details can be found in the following documents:

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