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:
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.
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.
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.
iv.
A cumulative limit on all exposures/transactions to non-bank related parties shall be 50% of the banks eligible capital.
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.
