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  • Exempt Exposures to Parties not Connected to the Licensee

    • CM-2.6.1

      Certain types of exposure are exempt from the 15 percent exposure limit set out in CM-2.5.3, but commitment to such exposures must be reported to the CBB on a quarterly basis using the Form PIRI provided in Appendix BR-5.

      Added: June 2022

    • CM-2.6.2

      These exemptions fall into the following categories and are subject, in each case, to the policy statement:

      (a) Short term interbank exposures, with original maturities of 3 months or less to parties not connected to the reporting licensee;
      (b) Exposures to GCC governments and their public sector entities that are not connected to the reporting licensee and do not operate on a commercial basis, as set out in the guidelines to the PIRI (see Module CA).
      (c) Exposures secured by cash or GCC government securities or guarantees;
      (d) Exposures to central governments who are members of the Organisation for Economic Cooperation and Development (‘OECD’) or exposures secured by OECD central government securities/guarantees;
      (e) Pre-notified exposures which are covered by a guarantee from the licensee’s parent (see Paragraphs CM-2.6.9 to CM-2.6.12); and
      (f) Sukuk or other Shari’a compliant securities issued or exposure to / exposure guaranteed by the Islamic Development Bank or any of its subsidiaries and other multilateral development banks, such as IMF, World Bank, Arab Monetary Fund, Asian Development Bank, African Development Bank, European Bank of Reconstruction and Development.
      Amended: October 2022
      Added: June 2022

    • CM-2.6.3

      Where two or more entities that are outside the scope of sovereign exemption are controlled by or are economically dependent on an entity that falls within the scope of the sovereign exemption referred to in paragraph CM-2.6.2, and are closely related, those entities need not be deemed to constitute a group of closely related counterparties pursuant to paragraph CM-2.5.4. Additionally, consistent with Module CA, where other supervisors also treat claims on named PSEs as claims on their sovereigns, claims to those PSEs are treated as claims on the respective sovereigns.

      Added: June 2022

    • CM-2.6.4

      If a Bahraini Islamic bank licensee has an exposure to any entity noted in Paragraph CM-2.6.2 which is hedged by a Shari’a compliant hedging instruments for credit protection, the licensee will have to recognise an exposure to the counterparty providing the credit protection, as prescribed in Paragraphs CM-2.4.2 and CM-2.3.16, notwithstanding the fact that the original exposure is exempted.

      Added: June 2022