De Minimis Exemptions
CA-5.5.7
An
Islamic bank licensee doing negligible business in foreign currencies and which does not take foreign exchange positions for its own account may, at the discretion of the CBB and as evidenced by the CBB's prior written approval, be exempted from calculating the capital requirements on these positions. The CBB is likely to be guided by the following criteria in deciding to grant exemption to anyIslamic bank licensee :(a) TheIslamic bank licensee's holdings or taking of positions in foreign currencies, including gold and/or silver, defined as the greater of the sum of the gross asset positions and the sum of the gross liability position in all foreign positions and gold and/or silver, does not exceed 100% of its Total Capital as defined in CA-1.1.2 and subject to any limits described in section CA-2.2; and(b) TheIslamic bank licensee's overall net open position, as defined in Paragraph CA-5.5.15 does not exceed 2% of its Total Capital described in Subparagraph CA-5.5.7(a).January 2015CA-5.5.8
The criteria listed above are only intended to be guidelines, and a bank will not automatically qualify for exemptions upon meeting them.
Islamic bank licensees doing negligible foreign currency business, which do not take foreign exchange positions for theIslamic bank licensee's own account, and wish to seek exemption from foreign exchange risk capital requirements, should submit an application to the CBB, in writing. The CBB will have the discretion to grant such exemptions. The CBB may also, at its discretion, fix a minimum capital requirement for anIslamic bank licensee that is exempted from calculating its foreign exchange risk capital requirement, to cover the risks inherent in its foreign currency business.January 2015CA-5.5.9
The CBB may, at a future date, revoke an exemption granted to an
Islamic bank licensee , if the CBB is convinced that the conditions on which the exemption was granted no longer exist.January 2015
