Exposures/transactions to related parties are subject to measurement requirements as prescribed in SAMA Rules on Large Exposures of Banks. Subject to the following limits:
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| i. | The sum of all exposures/transactions values a bank has to a non-bank related party must not be higher than 5% of the bank’s available eligible capital base at all times. However, a bank may have exposure/transaction to its non-banking subsidiary in financial sector of up to 25% of the banks eligible capital.
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| ii. | Banks exposures/transactions to a non-bank related party that is a listed company in the Saudi stock exchange are exempted from the 5% limit specified in section 5.1.i, the sum of all exposures/transactions values a bank has to a non-bank related party that is a listed company in the Saudi stock exchange must not be higher than 10% of the Bank’s available eligible capital base at all times.
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| iii. | Where a related party is included within a Group of Connected Counterparties, the exposure/transaction limit specified under Sections 5.1.i and 5.1.ii above shall be applicable, in addition to the overall group exposure limit as specified in SAMA Rules on Large Exposures of Banks.
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| iv. | A cumulative limit on all exposures/transactions to non-bank related parties shall be 50% of the banks eligible capital.
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Any breaches of the exposure/transaction limits, must be communicated immediately to SAMA. The communication to SAMA must also include the bank’s action plan to bring the exposure/transaction to within the breached limit. Furthermore, any such breaches may attract punitive supervisory action depending upon their materiality.
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