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  • Exposures undertaken by a subsidiary bank

    • CM-5.6.7

      Where exposures undertaken by a Bahrain subsidiary of an overseas bank are guaranteed by its parent, the Bahrain subsidiary bank may be deemed to have an exposure to its parent.

    • CM-5.6.8

      Under the terms of this module (see paragraph CM-5.6.2), such indirect exposures to a parent bank may be exempt from the limits on large exposures if the Agency is satisfied that:

      (a) such exposures are entered into within the terms of a policy agreed by the parent bank, and
      (b) there are guarantees in place from the parent bank to protect the subsidiary should the exposure become impaired or require to be written off.

    • CM-5.6.9

      In the case of a Bahrain incorporated bank's subsidiary inside Bahrain, in order for an exposure exceeding 15% of capital base to be acceptable in the subsidiary, the Bahrain parent must at all times have capacity to take on the capacity to the third party, without itself exceeding the limit of 15% of capital base. Also, the total exposure of the banking group to the customer must be within 15% of the parent bank's consolidated capital base.

    • CM-5.6.10

      The Agency will need to be satisfied that adequate control systems are in place to ensure that risks taken in the group as a whole are properly monitored and controlled.