Regulatory Alerts2011-11-30
Large Credit Exposures- Prudential Guideline No.5
The Central Bank of Solomon Islands issued Prudential Guideline No.5 to require all licensed financial institutions to limit large credit exposures and promote portfolio diversification. The guideline establishes a 25% capital limit for single borrowers and an 800% aggregate limit for large exposures, while defining related parties and specifying exemptions for interbank transactions and government-guaranteed loans. Institutions must enforce board-approved lending policies, report exposures as prescribed, and face corrective measures for non-compliance with these prudential standards.
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