CA-3.3.15
The following table sets out the applicable period of the contract that attracts capital charges:
(a) Salam with Parallel Salam
| Applicable Stage of Contract | Credit RW | Market Risk Capital Charge |
| Payment of purchase price by the bank of a Salam customer |
Based on customer's rating or 100% RW for unrated customer. No Netting of Salam exposures against parallel Salam exposures. (See section CA-4.2) |
Two approaches are available. Maturity Ladder Approach (see paragraphs CA-5.6.9 to CA-5.6.12 of chapter CA-5) Price risk (see CA-5.2.2 of chapter CA-5) |
| Receipt of the purchased commodity by the bank. Asset available for delivery to the customer. If the bank has legal right to recoup from the customer any loss on disposing of the asset |
Based on customer's rating or 100% RW for unrated customer. No Netting of Salam exposures against parallel Salam exposures. (See section CA-4.2) |
NA |
| Receipt of the purchased commodity by the bank. Asset available for delivery to the customer - If the bank has no legal right to recoup from the customer any loss on disposing of the asset | NA |
Two approaches are available. Maturity Ladder Approach (see paragraphs CA-5.6.9 to CA-5.6.12 of chapter CA-5) Price risk (see paragraph CA-5.2.2 of chapter CA-5) |
| The purchased commodity is sold and delivered to the buyer and the amount is received. | NA | NA |
(b) Salam without Parallel Salam
| Applicable Stage of Contract | Credit RW | Market Risk Capital Charge |
| Payment of purchase price by the bank of a Salam customer. At this stage of the contract, only one of credit or market risk is possible at the same time. To be prudent, higher of the two should be provided (not both). | The higher of the following (credit or market) | |
|
Based on customer's rating or 100% RW for unrated customer. (See section CA-4.2) |
Price risk but without additional 3 %. (see paragraph 5.2.2 of chapter CA-5) | |
| Receipt of the purchased commodity by the bank | NA | Price risk but without additional 3 %. (see paragraph 5.2.2 of chapter CA-5) |
| The purchased commodity is sold and delivered to the buyer. | NA | NA |
Amended: April 2011
April 2008
April 2008