Regulations and Standards

The Eastern Caribbean Central Bank will issue Prudential Standards pursuant to the authority contained in Section 184 of the Banking Act, 2015.


Regulations 

In accordance with Section 183 of the Banking Act, the Minister, upon the recommendation of the Eastern Caribbean Central Bank, may make Regulations as may be required from time to time for giving effect to the provisions of this Act.

 

Enforced Prudential Guidelines/Standards

Valuation Prudential Standards

The Valuation Prudential Standards for Licensed Financial Institutions Under The Banking Act, 2015 address Real Estate appraisals and evaluations used to support Real Estate related financial transactions. These Standards are structured in accordance with internationally accepted valuation standards, and are intended to provide guidance to financial institutions licensed under the Banking Act on the principles for asset valuations and the establishment of the minimum content of valuation programmes.


External Auditing Guidelines

These guidelines seek to provide financial institutions licensed under the Banking Act with minimum requirements in determining external auditors’ suitability for appointment. They highlight key expectations which management should have of external auditors in the conduct of the audit based on international best practices.

These guidelines also seek to increase financial institutions’ awareness of the external auditors’ reporting obligations to the Central Bank regarding transactions or conditions that impinge on the well-being of the financial institution.


Prudential Standards for Internal Auditing

This Prudential Standard shall come into effect on the 1st day of January 2020. This Prudential Standard applies to all institutions licensed under the Banking Act. This Standard must be read in conjunction with the suite of Prudential Standards issued by the ECCB. All submission timeframes would be measured in calendar days.

Click to read Standards


Prudential Standards on Permissible Activities

This Prudential Standard aims to:

(a)  List the activities that have been deemed to be banking practice under section 103(2)(n) of the Act;

(b) Establish the conditions under which the Central Bank would consider any other permissible activity under the Act.

Click to read Standards


Guidelines On Credit Risk Management For Institutions Licensed To Conduct Banking Business Under The Banking Act

These guidelines seek to promote sound credit risk management at licensed financial institutions. They outline the minimum requirements of a comprehensive credit risk management programme, which financial institutions should develop and implement in accordance with a defined credit risk strategy. The guidelines are reflective of the Basel Committee’s 17 Principles for Management of Credit Risk (September 2000).


Anti-Money Laundering Guidance Notes For Licensed Financial Institutions

The ECCB issued these guidance notes in May 1995 to assist financial institutions in developing programmes to combat money laundering. They promote the implementation of adequate anti-money laundering policies, procedures and controls as they relate to customer identification, verification of transactions, record retention, reporting of suspicious activity, recruitment and training of employees and audit reviews.

ECCU member territories subsequently passed more comprehensive legislation and guidance notes, which ECCB’s guidance notes are expected to complement. Where the requirements of ECCB’s guidance notes differ with the individual territory’s guidance notes, regulations or laws, the territory’s guidance notes, regulations or laws would take precedence.


Synopsis Of The Administrative Guidelines Governing Establishment And Maintenance Of Relationships By Financial Institutions With Shell Banks 

The administrative guidelines governing the establishment and maintenance of relationships between financial institutions and shell banks seeks to prevent a licensed financial institution from directly or indirectly establishing or maintaining relationships with shell banks.

These guidelines complement the existing Anti-Money Laundering Guidance Notes issued by the ECCB, and the guidance notes, regulations and laws issued by ECCU member governments. Where the requirements of these guidelines differ with the guidance notes, regulations or laws of a territory, the territory’s guidance notes, regulations or laws would take precedence.


Synopsis Of The Prudential Credit Guidelines

The Prudential Credit Guidelines seeks to establish minimum standards for the administration, measurement and monitoring of credit risk in the portfolios of institutions licensed under the Banking Act. It also sets minimum provisioning requirements and provides guidance pertaining to the suspension of interest, treatment of renegotiated loans and the write-off of loans classified as loss.


Synopsis Of The Prudential Guidelines: Controlling Risk In Correspondent Accounts

The Prudential Guidelines on Controlling Risk in Correspondent Accounts seeks to restrict access to financial institutions licensed under the Banking Act by financial institutions not licensed under the Banking Act and/or supervised by the Eastern Caribbean Central Bank.

These guidelines complement the existing Anti-Money Laundering Guidance Notes issued by the ECCB, and the guidance notes, regulations and laws issued by ECCU member governments. Where the requirements of these guidelines differ with the individual territory guidance notes, regulations or laws, the territory’s guidance notes, regulations or laws would take precedence.


Liquidity Risk Management Guidelines 

The liquidity risk management guidelines seek to provide financial institutions licensed under the Banking Act with minimum standards for the identification, measurement, monitoring and management of liquidity risk. They highlight key principles for the management of liquidity risk and minimum requirements for liquidity risk management programmes.

The guidelines indicate that at a minimum, each financial institution is expected to be able to identify, understand and measure the risks associated with the management of liquidity. The importance of managing funding sources and uses, and foreign currency liquidity is emphasised. The guidelines also advocate the implementation of effective policies and controls and the establishment of a contingency plan. The guidelines speak to the active involvement of the board and management in the management of liquidity and its associated risks.


Related Party Transaction Guidelines

The guidelines seek to ensure that licensed financial institutions are not the subject of improper dealings by related parties and that transactions with related parties are carried out on terms and conditions that are consistent with or substantially the same as with a non-related parties.

The guidelines identify related parties and establish a review process for transactions with such parties. The objective of the review is to ensure that related parties do not improperly use the institutions. The guidelines also seek to ensure adequate disclosure of related party transactions in the financial statements and to the Central Bank to facilitate transparency of operations.


Corporate Governance Guidelines

These guidelines seek to encourage a governance framework that promotes among financial institutions, high standards of professional conduct, prudent and diligent discharge of duties and compliance with applicable laws, regulations and guidelines. Although the guidelines are not intended to be prescriptive, they set out the minimum standards the ECCB expects from financial institutions when implementing processes, structures and information systems used for managing the institution.

The guidelines focus on the responsibilities of shareholders, the board of directors and each director to the overall corporate governance process, given their level of control and influence within the organisation.

 

Prudential Standards for the Management of Operational Risk for Institutions Licensed Under the Banking Act

Pursuant to the authority granted under section 184 of the 2015 Banking Act, the Eastern Caribbean Central Bank (ECCB) hereby issues the Prudential Standards for the Managment of Operational Risk for Institutions Licensed Under the Banking Act. This standard is effective as at 1 August 2020. Please click here to view the full document.

 

Prudential Standard for the Outsourcing of Services for Institutions Licensed to Conduct Business Under the Banking Act

Pursuant to the authority granted under Section 184 of the Banking Act, 2015 (the Act), the Eastern Caribbean Central Bank (ECCB) has issued the Prudential Standard for the Outsourcing of Services for Institutions Licensed under the Banking Act (the standard). The standard will come into effect from 1 October 2020. Click here to read the full document. 

 

Prudential Standard for the Treatment of Impaired Assets for Institutions Licensed Under the Banking Act

This Prudential  Standard is issued by the Eastern Caribbean Central Bank, in the exercise of the powers conferred on it by section 184 of the Banking Act,  2015. Click here to read the full document.

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