On 1 October 2020, the National Bank of Ukraine (NBU) commenced the application of the common procedure and methodology of supervisory review and evaluation process known as SREP. The CAMELSO rating system for evaluating banks’ operations will not be used any more.
The CAMELSO rating system, which was introduced in Ukraine as early as in 1998, was an instrument for evaluating bank capital, assets, management, proceeds and liquidity as part of inspections. The rating system evolved and expanded in line with the development of the regulatory requirements.
In 2018, according to the Guidelines of the European Banking Authority for common procedures and methodologies for the supervisory review and evaluation process, the NBU began introducing SREP supervisory instruments in line with risk-based and forward-looking approaches. The instruments are based on risk assessment and risk management quality in a bank, its corporate governance, including evaluation of collective suitability of collegial bodies and the internal control system, and the institution's capability to ensure business continuity.
Furthermore, the SREP methodology that incorporated CAMELSO components is based on risk assessment with consideration of a bank’s current condition, strategy, business model, development, and assessment of its future performance.
The assessment according to the SREP methodology is continuous and covers all banks simultaneously. In contrast to CAMELSO, SREP is conducted annually as of 1 January. SREP can be updated quarterly considering the development of quantitative indicators and new material information, including inspection findings.
The Onsite Inspection Department has stopped using the CAMELSO system and will provide recommendations on the SREP score according to findings of respective inspections. In the future, SREP scores are expected to be made public.
The NBU Board adopted said amendments on 30 September 2020.