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APRA publishes frequently asked question on standardised approach to credit risk-weighted assets

Wednesday 17 June 2020

The Australian Prudential Regulation Authority (APRA) has published a frequently asked question (FAQ) providing clarification to authorised deposit-taking institutions (ADIs) in determining their capital requirements under Prudential Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk (APS 112).

APS 112 requires an ADI to revalue property offered as security for residential mortgages when it becomes aware of a material change in the value of property in an area or region. APRA confirms that, consistent with its future intention of removing this requirement from the ADI capital framework, ADIs utilising the standardised approach to credit risk will not be expected to revalue residential mortgage property for the purpose of meeting the requirements of APS 112. 

The FAQ is available on the APRA website at: Banking COVID-19 frequently asked questions.

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For more information contact APRA on 1300 558 849.

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding $8.6 trillion in assets for Australian depositors, policyholders and superannuation fund members.