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CM-5.3.2

Past version: Effective from 01 Oct 2007 to 31 Dec 2010
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As a general rule, exposures should be reported on a gross basis (i.e. no offset). However, debit balances on accounts may be offset against credit balances on other accounts with the bank if:

(a) a legally enforceable right of set off exists in all cases (as confirmed by a legal opinion addressed to the bank) in respect of the recognised amounts;
(b) the debit and credit balances relate to the same customer or to customers in the same group; and
(c) the bank intends either to settle on a net basis, or to realise the debit balances and settle the credit balances simultaneously.

For a group facility, a full cross guarantee structure must also exist before debit balances on accounts may be offset.

October 07