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  • Consolidated Risk-weighted Assets

    • CA-1.1.3

      Consolidated Total risk-weighted assets are determined by:

      (a) Multiplying the capital requirements for market risk (see CA-1.1.7) and operational risk (see CA-1.1.6) by 12.5 for the Islamic bank licensee and all its consolidated subsidiaries; and
      (b) Adding the resulting figures to the sum of risk-weighted assets for credit risk (see CA-1.1.4) and securitisation risk for the Islamic bank licensee and all its subsidiaries (see CA-1.1.5).
      January 2015

    • CA-1.1.4

      For the measurement of their credit risks, Islamic bank licensees measure the risks in the standardised approach, applying the measurement framework described in Chapters CA-3, CA-4, and CA-9 (real estate) and subject to the credit mitigation techniques outlined in Section CA-4.7 of this Module and subject to any adjustments described in Paragraphs CA-1.1.9 onward in relation to assets funded by Profit Sharing Investment Accounts (PSIAs).

      January 2015

    • CA-1.1.5

      The Sukuk and securitisation framework is set out in Chapter CA-8. Islamic bank licensees must apply this framework for determining regulatory capital requirements on exposures arising from traditional securitisations or sukuks.

      January 2015

    • CA-1.1.6

      For the measurement of their operational risks, Islamic bank licensees have a choice, subject to notification to the CBB, between two broad methodologies:

      (a) The basic indicator approach, by applying the measurement framework described in Chapter CA-6 of this Module; and
      (b) The standardised approach (also in Chapter CA-6). This approach is subject to certain conditions (outlined in Chapter OM-8) and requires the explicit approval of the CBB.
      Amended: January 2022
      January 2015

    • CA-1.1.6A

      For the purpose of Sub-paragraph CA-1.1.6 (b), a licensee must provide appropriate justification and seek CBB’s prior approval, if it wishes to revert from the standardised approach to the basic indicator approach.

      Added: January 2022

    • CA-1.1.7

      For the measurement of market risk in the trading book, Islamic bank licensees must measure the risks in a standardised approach, applying the measurement frameworks described in Chapter CA-5 of this Module. Market risk inherent in certain Shari'a compliant products is outlined in detail in Chapter CA-3. The treatment of market risk positions funded by PSIAs is given in Paragraphs CA-1.1.9 onward.

      January 2015

    • CA-1.1.8

      In light of Paragraphs CA-1.1.3 to CA-1.1.7, each Islamic bank licensee's overall capital requirement consists of:

      (a) The credit risk requirements laid down in Chapters CA-3, CA-4, and CA-9 (subject to any PSIA adjustment below) and the charges in respect of sukuk and securitisations in Chapter CA-8 and including the credit counterparty risk on all over-the-counter Shari'a compliant hedging contracts whether in the trading or the banking books (see CA-4.5.15-16 and Appendix CA-2);
      (b) The capital charges for operational risk described in Chapter CA-6; and
      (c) The capital charges for market risks described in Chapters CA-3 and CA-5 summed arithmetically subject to any PSIA adjustment below.
      January 2015