Book traversal links for 4.1. Exposure Limits
4.1. Exposure Limits
Effective from Sep 08 2019 - Sep 07 2019
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All banks are required to ensure compliance of the following exposure limits: | ||
i. | Single Counterparty: The sum of all exposures values a bank has to a single nonbank counterparty (excluding individuals, sole proprietorships and commercial undertakings majority owned by Saudi government) must not be higher than 15% of the banks available eligible capital base at all times. | |
ii. | Group of Connected Counterparties: The sum of all exposures values a bank has to a group of connected non-bank counterparties must not be higher than 15% of the bank's available eligible capital base at all times. Subject to the following: | |
a. | Where an individual/sole proprietorship/partnership is included within a Group of Connected Counterparties, the exposure limit specified under Section 4.1 ,iii below shall also be applicable, in addition to the overall group exposure limit, | |
b. | The sum of all exposures values a bank has to the group of connected counterparties where a commercial undertakings majority owned by Saudi government is included can be higher than 15% of the bank's eligible capital base subject to the limit specified in 4.1 .v. | |
Furthermore, the sum of a bank’s exposures to the entities included within a group of connected counterparties will also be subject to the regulatory reporting requirements as specified under Section 7 of these Rules. | ||
iii. | Individual/Sole proprietor: The sum of all the exposures values a bank has to an individual or a sole proprietorship or a partnership must not be higher than 5% of the banks available eligible capital base at all times. | |
iv. | Banks: The sum of all the exposures values a bank has to another bank must not be higher than 25% of the lending bank's available eligible capital base at all times. However. If the lending bank and/or the counterparty bank are/is Domestically - Systemically Important Banks (D-SIBs), or Globally - Systemically Important Banks (G-SIBs) as defined in Appendix VI, then the sum of all exposures of the lending Bank to its counterparty bank cannot exceed 15% of the lending bank’s available eligible capital base at all times. | |
v. | Commercial Undertakings Majority Owned by Saudi Government: The sum of all exposures values a bank has to a commercial undertakings majority owned by Saudi Government must not be higher than 25% of the bank’s available eligible capital base at all times; | |
vi. | Aggregate Large Exposures: The aggregate of all Large Exposures shall not exceed 6 times of the bank’s eligible capital. |