Bank Negara Malaysia has issued the following policy documents today:

• Capital Adequacy Framework (Standardised Approach for Credit Risk)
• Revised Capital Adequacy Framework (Capital Components)
• Revised Capital Adequacy Framework for Islamic Banks (Capital Components)

The Capital Adequacy Framework (Standardised Approach for Credit Risk) policy document sets out the standards and guidance for financial institutions to calculate the capital required for credit risk under the standardised approach in line with Basel III international capital standards. For financial institutions applying the standardised approach for credit risk, this policy document will come into effect on 1 July 2026. The effective date takes into consideration the data and system enhancements required for financial institutions to comply with the more granular requirements under the revised standards.

Financial institutions applying the internal-ratings based approach for credit risk will not be required to comply with the Capital Adequacy Framework (Standardised Approach for Credit Risk) until such time when the policy document on Capital Adequacy Framework (Internal-Ratings Based Approach for Credit Risk) is finalised and communicated.