Rule on Country and Transfer Risk Management for Banks

Summary

This is a short CIMA regulatory Rule, dated November 2006, setting out mandatory requirements for country and transfer risk management applicable to banks licensed under the Banks and Trust Companies Law. It was issued under section 34 of the Monetary Authority Law and is intended to be read together with CIMA's related Statement of Guidance on Country and Transfer Risk Management for Banks, which provides interpretive detail on how to meet the Rule's requirements.

• Board-approved framework: Banks must have board-approved strategies, policies, and procedures for managing country and transfer risk that are appropriate to their size, complexity, and nature of activities, including setting operating limits or other risk controls.
• Ongoing management: Banks must actively measure, monitor, and control this risk on an ongoing basis.
• Enforcement exposure: Breach of the Rule exposes a bank to CIMA's standard enforcement powers under its Enforcement Manual and applicable law.

This document does not contain specific filing deadlines or transitional provisions; it establishes ongoing, ever-present risk management obligations rather than one-off compliance actions.

Key obligations

• Banks must establish, implement, and maintain strategies, policies, and procedures for country and transfer risk management appropriate to their size, complexity, and nature of activities, including operating limits or other practices for such exposures.
• These strategies, policies, and procedures must be approved by the bank's board of directors.
• Banks must take necessary steps to measure, monitor, and control country and transfer risk on an ongoing basis.

Applies to

banks