PCD-2.4.2

In case of non-compliance3 with the large exposure limits (as set out in Chapter CM-4 of the Rulebook), the excess will be deducted from the capital of the bank for regulatory capital purposes. For off-balance sheet items, the excess is to be calculated after the application of credit conversion factors as detailed in chapter CA-4 of the Capital Adequacy Module for Islamic banks. These deduction requirements apply for direct exposures (i.e. funded by a bank's own funds or unrestricted investment accounts) and restricted investment accounts.


3 For the purpose of this rule, non-compliance means where a large exposure is taken without prior approval of CBB.

Amended: January 2011