Rwanda has joined South Sudan in requiring Kenyan banks to inject additional billions into the subsidiaries after the regulator National Bank of Rwanda (NBR) issued new minimum capital requirements.
New guidelines by Rwanda’s financial watchdog have given the banks a year to raise capital buffers by up to 2.5 per cent of their deposits to improve their stability in times of losses and economic stress.
Introduction of the capital buffer will push the minimum ratio of core capital to total deposits up from the current eight per cent to 10.5 per cent.
The ratio of total capital to credit advances will also go up to 14.5 per cent.
The introductions will see Rwanda banking sector match the capital requirements of its Kenyan counterpart.
“The parallel running exercise aims at ensuring that banks prepare adequate data and system requirements and building capacity and skills to ensure full implementation in January 2017,” reads the directive signed by NBR, governor John Rwangombwa.
