PCD-A.1.1

This Module sets out the regulatory rules for prudential consolidation and pro-rata consolidation for banks where they own controlling or significant minority stakes in regulated financial entities (including qualifying holdings). It also sets out the framework for the prudential deductions from capital for (a) investments in regulated financial entities (below the significance threshold determined for consolidation and pro-rata consolidation), (b) significant investments in insurance entities (c) significant investments in commercial entities and (d) exposures to counterparties exceeding the large exposure limits as set out by CBB.

PCD-A.1.2

Consolidation and pro-rata consolidation, wherever referred to in this Module, denotes consolidation and pro-rata consolidation rules only for the purposes of computing regulatory minimum capital requirements and as such these do not impact on accounting consolidations and pro-rata consolidation of banks and banking groups, for which there are separate applicable standards and best practices.

PCD-A.1.3

For prudential purposes, CBB will supervise banks and banking groups on a consolidated basis, in accordance with consolidation and deduction rules outlined in this Module.

PCD-A.1.4

The rules for prudential consolidation and pro-rata consolidation are set out in PCD-1.

PCD-A.1.5

The rules for prudential deductions from capital are set out in PCD-2. The prudential framework is also applicable to banks on a standalone basis.

PCD-A.1.6

This Module complements Modules CA and CM, which respectively set minimum capital requirements and large exposure requirements for licensed Islamic banks in Bahrain.

Legal Basis