• Exposures undertaken by a subsidiary bank or by a branch outside Bahrain

    • CM-4.5.5

      In the case of banks, which are the Bahrain subsidiaries of overseas banks, the Agency will agree in writing with the supervisory authority of the parent bank, the size of exposures that can be undertaken by the subsidiary.

    • CM-4.5.6

      Exposures undertaken by a branch of a foreign bank on the books in Bahrain should be within the policy statement of the parent bank (company) as agreed by the parent's regulatory authority.

    • CM-4.5.7

      Overseas subsidiaries of Bahrain banks will be expected to comply with the regulatory requirements of the country in which they are located.

    • CM-4.5.8

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

    • CM-4.5.9

      Under the terms of this Module, 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 non-performing or require to be written off.

    • CM-4.5.10

      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 for the subsidiary, the Bahrain parent must at all times have room to take over the exposure, without itself exceeding the limit of 15% of capital base. Also, the combined (on and off balance sheet) exposure of the banking group to the customer must be within 35% of the parent bank's consolidated capital base.

    • CM-4.5.11

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