18.Exposures to MDBs shall in general be treated similar to claim on banks, but without using the preferential treatment for short term claims. However, highly rated MDBs, which meet certain criteria specified below, are eligible for a preferential 0% risk weight.

1. i.Very high quality long-term issuer ratings, i.e. a majority of an MDB's external assessments must be AAA;
2. ii.Shareholder structure is comprised of a significant proportion of sovereigns with long-term issuer credit assessments of AA- or better, or the majority of the MDB's fund-raising is in the form of paid-in equity/capital and there is little or no leverage;
3. iii.Strong shareholder support demonstrated by the amount of paid-in capital contributed by the shareholders; the amount of further capital the MDBs have the right to call, if required, to repay their liabilities; and continued capital contributions and new pledges from sovereign shareholders;
4. iv.Adequate level of capital and liquidity (a case-by-case approach is necessary in order to assess whether each MDB's capital and liquidity are adequate), and
5. v.Strict statutory lending requirements and conservative financial policies, which would include among other conditions a structured approval process, internal creditworthiness and risk concentration limits (per country, sector, and individual exposure and credit category), large exposures approval by the board or a committee of the board, fixed repayment schedules, effective monitoring of use of proceeds, status review process, and rigorous assessment of risk and provisioning to loan loss reserve.

19.MDBs currently eligible for 0% risk weight are the World Bank Group comprised of the International Bank for Reconstruction and Development, the International Finance Corporation, the Multilateral Investment Guarantee Agency and the International Development Association, the Asian Development Bank, the African Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, the European Investment Bank, the European Investment Fund, the Nordic Investment Bank, the Caribbean Development Bank, the Islamic Development Bank, the Council of Europe Development Bank, the International Finance Facility for Immunisation and the Asian Infrastructure Investment Bank. The list of MDBs is by the Basel Committee on Banking Supervision (BCBS) and can be found on the website www.bis.org. All banks are required to refer to and comply with the BCBS list. Whilst the BCBS evaluates the eligibility of the entities on a case-by-case basis, the Central Bank has no role in the assessment and decision of entities being eligible for 0% risk weight.