Banks to recalculate RWA based on Basel III Reforms
JAKARTA — Banks are mandated to recalculate risk-weighted assets (RWA) and adjust them according to Basel III Reforms starting January 1, 2024. The law that regulates this new obligation is issued by the Financial Services Authority (OJK) on its OJK Regulations (POJK) No.207/2022 regarding the Minimum Capital Requirement for Commercial Banks.
Quoted today (12/1), Darmansyah, Director of Public Relations of OJK, claimed that this regulation will help in adjusting banks' capital that is more sensitive to market risk. "The technical regulations regarding RWA will be further explained in OJK Circulatory Letter," he added.
Nevertheless, there will be no changes in the regulation of banks' core and complementary capital, which has been featured in POJK No. 11/POJK.03/2016.
On top of that, banks are also asked to apply standard capital requirement for bank exposure to central counterparties, as well as margin requirement for non centrally cleared derivatives, in order to reduce systemic risks in the finance market.
Said regulation has taken effect since it was billed last year, on December 28, 2022.
"Banks are urged to conduct transaction through central counterparty institutions," Darmansyah said. (LK/ZH)