NBE Updates Banking Supervision with Basel-Aligned Capital Rules

Nov 8 , 2025

The National Bank of Ethiopia (NBE) has issued a Risk-Based Capital (RBC) Adequacy Directive, modernising the country's banking supervision framework in line with Basel II and III standards. The directive raises the minimum capital adequacy ratio from 8pc to 11pc, requiring banks to maintain at least seven percent of assets as high-quality Tier 1 capital. It also mandates sufficient capital coverage for credit, market, and operational risks, clearly defining the boundaries between banking and trading books. NBE is giving banks time to adapt, allowing system upgrades, enhanced data quality, and stronger internal controls, with full compliance expected by December 2026. The reform strengthens governance, increases board accountability, and introduces rigorous quarterly reporting and enforcement mechanisms. The central bank said the move will improve transparency, risk management, and investor confidence, supporting broader financial reforms and sustainable economic growth. NBE views the directive as a key step in reinforcing the resilience and stability of the banking sector.