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  • CA-4.3 CA-4.3 Supervisory Slotting Criteria

    • CA-4.3.1

      Equity exposures in the nature of specialized financing will be risk-weighted as per the supervisory slotting criteria as detailed below. Specialized lending is basically a typical kind of exposure in which some special underlying assets are both the source of repayment and security. This may include financing extended to:

      •   Power plants, chemical processing plants, mines, transportation infrastructure, environment, telecommunications infrastructure, ships, aircraft, satellites, railcars, fleets, crude oil, metals, crops, office buildings to let, retail space, multifamily residential buildings, industrial or warehouse space, hotels, High volatility real estate etc.
      •   Retail space;
      •   Multifamily residential buildings;
      •   Industrial or warehouse space;
      •   Hotels.
      Amended: April 2011
      April 2008

    • CA-4.3.2

      A bank is required to map its RW into four supervisory categories as set out in the Appendix CA-1 (specialised financing) for Limited and Non-Recourse Istisna'a exposures, Mudarabah exposures, Sukuk exposures and Musharakah in a business venture exposures, where the RW for each category is as follows:

      Supervisory Categories Strong Good Satisfactory Weak
      External Credit Assessments BBB- or better BB+ or BB BB- to B+ B to C-
      Risk Weights 70% 90% 115% 250%
      Apr 08

    • CA-4.3.3

      A bank with Diminishing Musharaka exposures in real estate are required to map its RW into the four supervisory categories as set out in Appendix CA-2 (Diminishing Musharaka in real estate) where the RW of each category is as follows:

      Supervisory Categories Strong Good Satisfactory Weak
      Risk Weights 90% 110% 135% 270%
      Apr 08

    • CA-4.3.4

      The above RW under the slotting criteria for specialised financing include an additional fixed factor, equal to a 20% RW, to cater for the potential decline in the Musharakah's net asset value.

      Apr 08

    • CA-4.3.5

      If any exposure which is to be risk-weighted under this sub-section becomes past due, it will be risk-weighted at the higher of risk-weight applicable under CA-4.2.21 or the risk-weight applicable under this sub-section e.g. if an exposure getting 90% risk-weight under CA-4.3.2 above becomes past due, it will be risk-weighted under CA-4.2.21 (at 100% or 150% whichever is applicable). However if an exposure getting 250% risk-weight under CA-4.3.2 above becomes past due, it will continue to be risk-weighted at 250%.

      Apr 08