8. Prudential Requirements
| No: 44012303 | Date(g): 11/9/2022 | Date(h): 15/2/1444 | Status: In-Force |
Banks must follow SAMA's prudential requirements pertaining to regulatory capital for the calculation of risk weights for assets funded by PSIAs and also ensure appropriate calculation of PSIA funds in their Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) as per SAMA’s liquidity requirements.
PSIA funds and any associated reserve accounts (PER and IRR) are prohibited from being included in the calculation of a bank’s regulatory capital.
Banks must ensure that they manage concentration risks arising from PSIAs in line with SAMA's Large Exposure Rules.
If the management of IAH funds is outsourced to a 3rd party, Banks must ensure that such an arrangement is in compliance with all applicable outsourcing rules and regulations issued by SAMA.
SAMA may, by way of prudential assessment, direct a bank to treat, or not to treat, an arrangement between the bank and a client (for example by way of mudarabah, musharakah or wakalah) to be a PSIA.