The National Bank conducts the supervision and regulation of microbanks in accordance with the following principles of risk-based supervision:

 

• Concentration on material risks - focusing on risks in proportion to their materiality, explicitly concentrating on risks that pose the most significant threat to the stability of the financial sector or the protection of the financial resources of depositors, creditors, and investors (considering the relevant order defined by legislation);

 

• Forward-looking approach - early identification of threats and problems in the financial sector and timely implementation of appropriate corrective measures to eliminate them;

 

• Dialogue with regulated financial institutions - allows the supervisor to understand the internal culture, strategy, and motivations of the financial institution, enhances the internal control mechanisms from the supervisory board and management, and also refines risk management.

 

• Micro and macroprudential supervision coordination - In the supervisory process, during macroprudential analysis, consideration of the current systemic risks of the financial sector, measures aimed at their reduction, business and credit cycles, and other issues of macroprudential policy;

 

• Consistency, compliance, and compatibility - ensuring compliance with the requirements set for financial institutions, using uniform requirements and approaches in decision-making processes related to institutions with similar characteristics, and proportional response to risks;

 

• Efficient use of internal resources - a risk-based supervisory process and principle-based regulation imply the most efficient use of supervisory resources and a focus on practical ways to mitigate risks instead of a passive assessment of compliance with rules.