1.This Standard articulates specific requirements for the calculation of the operational risk capital requirement for banks in the UAE. It is based closely on requirements of the framework for capital adequacy developed by the Basel Committee on Banking Supervision (BCBS), specifically as articulated in Basel II: International Convergence of Capital Measurement and Capital Standards, June 2006, and subsequent revisions and clarifications thereto.

2.Banks are required to calculate operational risk capital charges according to the methods and criteria addressed in this Standard.

3.Capital requirements for Operational Risk apply on a consolidated basis for all banks in the UAE. Banks should follow the requirements of all other applicable Central Bank Standards to determine overall capital adequacy requirements.