Are you a supervised Financial Institution? Do you want Basel II Accord swift compliance at an affordable cost? Worry no more.
At Summit Consulting Ltd, we have developed a Basel II toolkit to facilitate your swift compliance to the Central Bank’s Instruction Circular ‘EDS.306.2’ dated 8th April 2021 with the subject matter “Implementation of the Basel II Accord in Uganda.”
According to the Instruction Circular, all Supervised Financial Institutions (SFIs) are required to assess their internal capital adequacy for covering all risks they can potentially face in the course of their operations. SFIs are obliged to comply with the requirements of the Bank of Uganda (BOU) as of 31st March 2021. Your bank is no exception, as long as you are a supervised financial institution.
The beauty of compliance requirements by the regulator is that the outcome is clear: a clean bill of health by the regulator following the on-site review. So, you do not have to worry about the “name” of the consultant or consulting firm working with you to attain these specific compliance requirements. All you must focus on is compliance with the issued instructions, which our toolkit helps you attain at minimal cost and inconvenience.
Are you a CEO, CFO, or compliance officer at your financial institution? Would you want to save time, money, and other resources in your Basel II compliance?
We hereby propose to you our custom in-house training to your staff in Basel II as well as help you in meeting all the requirements of the regulator and avoid any challenges in compliance.
How can Summit Consulting Ltd help you comply swiftly?
Our focus is on skills transfer to your team to understand the requirements, and compliance expectations and how to do it for sustainable operations and answering regulatory questions at any time.
We will support your Bank in:
- current state assessment — conducting a thorough review to determine the readiness of your Bank to implement Basel II, and creating the awareness needed to fully prepare key stakeholders to embrace the process
- generating stress test scenarios that ensure compliance with all the specified Bank of Uganda requirements. The stress testing scenarios shall be modeled according to your bank’s specific requirements,
- conducting tailored training to create awareness to key staff and stakeholders, as well as defining their roles in the compliance agenda
- developing robust stress testing model to meet BoU guidelines,
- developing ICAAP (internal capital adequacy assessment process) reporting template, and
- training the team on how to independently use and review the stress testing model(s). Taken together, by the end of the exercise you will save money and time. Remove anxiety in the process and empower your team to enjoy the process and love their jobs instead of burnout and worries
Working with external experts to support your internal team is the best strategy to reduce the compliance tasks while enabling internal processes to proceed. Your team not only learns a lot in a short while, but the external expert is also able to provide clarity of the journey, reduce worries and disruptions and get staff to appreciate the process and not look at it as a cost.
Why stress test?
If you want to test your body’s resilience, you run a marathon!
Stress testing is part of internal risk management and, through the Basel II capital adequacy framework, is now a required tool by the Bank of Uganda. When you conduct a stress test, it helps you to be alerted to adverse unexpected outcomes related to a variety of risks as well as an indication of how much capital might be needed to absorb losses should large shocks occur.
The Coronavirus pandemic has affected financial institutions differently. Businesses have been impacted. Some clients with loans due have had their cashflows disrupted. Stress testing helps examine the bank’s exposure to such unpredictable events like Coronavirus, and others to the bank’s liquidity and going concern potential.
Just like a healthy person must exercise, s/he must eat well. Similarly, stress testing supplements other risk management approaches and measures. Stress testing helps in providing forward-looking assessments of risk profile; overcoming limitations of models and historical data; supporting internal and external communication; feeding into capital and liquidity planning procedures; informing the setting of a banks’ risk tolerance, and facilitating the development of risk mitigation or contingency plans across a range of stressed conditions.
Stress testing is especially important after long periods of difficult economic and financial conditions, with systematic economic challenges.
As the world continues to battle the Coronavirus pandemic, it is timely to assess the risk profile and the extent to which banks are resilient to external shocks.
For a discussion or meeting or short presentation, contact us, call Godfrey on +256 775845691, 414 231136, or email ifrs9@summitcl.com or strategy@summitcl.com.
About Summit Consulting Ltd
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