Banking Compliance Procedures in Algeria Undergo Significant Overhaul
Enhanced Credit Rating System for Non-Financial Corporations
The Banque d’Algérie (BA) has undertaken a comprehensive overhaul of its credit rating system for non-financial corporations to enhance banking regulations and compliance procedures. This initiative aims to operationalize the acceptance of bank credit claims as collateral in central bank operations.
Key Objectives:
- Develop a detailed roadmap and tools for implementation
- Map the credit rating scale into a haircut schedule for credit claims
- Establish an internal credit rating system for credit claims
New Regulation on Outsourcing Activities
The Banque d’Algérie has developed new regulation for banks and financial institutions to regulate their outsourcing activities, aligned with European Banking Authority (EBA) guidelines. The regulation defines essential outsourced activities, minimum expectations regarding the outsourcing process, internal governance arrangements, risk management, and controls.
Key Features:
- Defines essential outsourced activities
- Minimum expectations regarding the outsourcing process
- Internal governance arrangements
- Risk management
- Controls
Enhanced Risk Rating Methodology
A separate mission by METAC focused on proposing enhancements to the risk rating methodology. The mission advised on a framework relating risk rating categories of banks to supervisory measures for early intervention and reviewed documentation of the rating architecture, processes, and procedures.
Key Enhancements:
- New indicators for each type of risks
- Individual risk weights to improve overall ratings
Compliance Risk Management Strategy for Extractive Industries
METAC provided tailored advice to the Algerian General Directorate of Taxes (DGI) on designing a compliance risk management strategy for the extractive industries, including oil, gas, and mining. The mission conducted an environmental scan of local circumstances, reviewed global EI business models, tax planning, and regulatory frameworks.
Key Deliverables:
- Draft mid-term program to provide regular and on-demand advice throughout FY25
- Enables DGI to implement a strategy to improve EI compliance and expand it to a broader tax base