CA-3.2.24
The following table sets out the applicable period of the contract that attracts capital charges:
(a) Murabahah and Non-binding MPO
| Applicable Stage of the Contract | Credit RW | Market Risk Capital Charge |
| Asset available for sale (asset on balance sheet)* | Not applicable | Price risk (15% Capital charge) |
| Asset is sold and delivered to a customer and the selling price (accounts receivable) is due from the customer. | Based on customer's rating or 100% RW for unrated customer (see paragraphs CA-3.2.11 and CA-3.2.12) | NA |
| Upon full settlement of the purchase price. | NA | NA |
* Also includes an asset which is in possession due to cancellation of PP by a non-binding MPO customer. Any HJ taken, if any, is not considered as eligible collateral and shall not be offset against the value of the asset.
(b) Binding MPO
| Applicable Stage of the Contract | Credit RW | Market Risk Capital Charge |
| Asset available for sale (asset on balance sheet)* - If the bank has legal right to recoup from the customer any loss on disposing of the asset | Asset acquisition cost less [market value of asset if eligible as collateral (net of any haircut**) plus any HJ] x applicable RW (see chapter CA-4) | NA |
| Asset available for sale (asset on balance sheet)* - If the bank has no legal right to recoup from the customer any loss on disposing of the asset | NA | Price risk 15% Capital charge minus HJ(if the bank has legal right to the HJ) |
| Asset is sold and delivered to a customer and the selling price (accounts receivable) is due from the customer. | Based on customer's rating or 100% RW for unrated customer (see section CA-4.2) | NA |
| Upon full settlement of the purchase price. | NA | NA |
* Also includes an asset which is in possession due to cancellation of PP by a customer.
** Please refer to CRM section CA-4.7 for eligibility of collateral and application of haircuts.
Amended: April 2011
April 2008
April 2008