CA-3.2.18
Past version: Effective from 01 Apr 2008 to 31 Dec 2008
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To be included in the regulatory retail portfolio, claims must meet the following criteria:
(a) Orientation — the exposure is to an individual person or persons or to a small business.
(b) Product — The exposure takes the form of any of the following: revolving credits and lines of credit (including credit cards and overdrafts), personal term loans and leases (e.g. installment loans, auto loans and leases, student and educational loans, personal finance) and small business facilities and commitments. Securities (such as bonds and equities), whether listed or not, are specifically excluded from this category. Mortgage loans are excluded to the extent that they qualify for treatment as claims secured by residential property. Loans for purchase of shares are also excluded from the regulatory retail portfolios.
(c) Granularity — The regulatory retail portfolio is sufficiently diversified to a degree that reduces the risks in the portfolio, warranting a 75% risk weight. No aggregate exposure to one counterpart9 can exceed 0.2% of the overall regulatory retail portfolio.
(d) The maximum aggregated retail exposure to one counterpart must not exceed an absolute limit of BD 250,000.
9 Aggregated exposure means gross amount (i.e. not taking any credit risk mitigation into account) of all forms of debt exposures (e.g. loans or commitments) that individually satisfy the three other criteria. In addition, "to one counterpart" means one or several entities that may be considered as a single beneficiary (e.g. in the case of a small business that is affiliated to another small business, the limit would apply to the bank's aggregated exposure on both businesses).
Apr 08