Regulatory Alerts2015-02-25
Rules on Large Exposures of Banks
The Saudi Arabian Monetary Agency issued these Rules to establish maximum exposure limits for banks, capping single counterparty exposures at 15% and aggregate large exposures at six times the eligible capital base. The framework mandates comprehensive measurement of on- and off-balance sheet exposures, defines connected and related counterparties based on control or economic interdependence, and grants targeted exemptions for sovereign, intra-group, and intraday interbank exposures. Effective July 2015, the Rules supersede prior regulations and require banks to implement robust internal monitoring systems, adhere to phased transition periods for existing exposures, and submit detailed regulatory reports to ensure portfolio diversification and financial stability.