The Guideline on Standardised Approach to Credit Risk provides a framework for banks to apply a uniform approach to the measurement of risks relating to their on- and off-balance sheet credit exposures for capital adequacy purposes. Banks shall be required to use the Standardised Approach to Credit Risk for capital adequacy purposes unless they have obtained approval from the Bank of Mauritius (the Bank) to use an internal ratings-based approach. This guideline also sets out the methodology for determining the appropriate risk weight for an exposure secured by eligible collateral, guarantee and/or credit derivative.
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