Regulatory Alerts2021-12-26
Limitations on the Indebtedness of a Borrower and of a Group of Borrowers Proper Conduct of Banking Business Directive no. 313
The Banking Supervision Department of the Bank of Israel amended Proper Conduct of Banking Business Directive no. 313 to refine the definition of 'control' regarding groups of borrowers. The update establishes that institutional investors holding less than 20 percent of means of control are exempt from specific control presumptions, thereby preventing volatile shifts in borrower groupings caused by minor equity fluctuations. These amendments aim to stabilize credit planning for borrower groups while maintaining the statutory definition of control under the Banking (Licensing) Law.
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