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  • The Simple Approach

    • CA-4.7.17

      The Islamic bank licensee can substitute the RW of the collateral for the RW of the counterparty for the collateralised portion of the exposure, subject to the collateral being pledged for at least the duration of the contract. The minimum RW of the collateralised portion is not lower than 20% (with a limited exception in Paragraph CA-4.7.19B).

      January 2015

    • CA-4.7.18

      The uncollateralised portion of the exposure continues to be assigned the RW of the counterparty.

      January 2015

    • CA-4.7.19

      A 0% RW is applied to the collateralised portion under the simplified method where the exposure and the collateral are denominated in the same currency, and the collateral consists of any of the following:

      (a) Cash or cash equivalents;
      (b) A deposit with the Islamic bank licensee; or
      (c) Sovereign/ PSE securities eligible for a 0% RW, and the market value of such securities has been discounted by 20%.
      January 2015