Regulatory Alerts2018-02-08
Rules on Large Exposures of Banks
Issued by the Saudi Arabian Monetary Agency in February 2018, these Rules establish binding limits on banks' exposures to single counterparties (15%), connected groups (15%), individuals (5%), and related parties (10%), while capping aggregate large exposures at six times the eligible capital base. The framework mandates precise measurement of on- and off-balance sheet exposures, recognizes eligible credit risk mitigation techniques, and applies to all locally licensed banks, subsidiaries, and foreign branches on consolidated and standalone bases. Superseding the 1994 circular, the Rules introduce structured transition periods for existing exposures and require immediate reporting of limit breaches to ensure credit concentration risk is effectively managed.