Regulatory Alerts2022-05-17
BS 8 - Connected Exposures Policy
The Reserve Bank of New Zealand issued this policy to establish standard registration conditions for locally incorporated banks regarding exposures to connected persons. It mandates that aggregate credit exposures to connected persons must not exceed a rating-contingent limit based on the bank's credit rating, with a separate 15 percent cap for non-bank connected persons. Additionally, the document requires that capital nature advances be deducted from Tier 1 capital and prohibits lending to connected persons on more favorable terms than those offered to non-connected persons.
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