Regulatory Alerts2019-10-29
Limitations on indebtedness of a borrower and of a group of borrowers
The Bank of Israel amended Proper Conduct of Banking Business Directive no. 313 to impose stricter concentration limits on borrowers engaging in speculative derivative and securities activities. The update restricts the indebtedness of such non-supervised borrowers to a maximum of 10 percent of a banking corporation's capital, a limit that also applies to cumulative exposure within connected borrower groups. These new requirements became effective on July 1, 2020, with existing non-compliant institutions required to reduce their exposure deviations through fixed quarterly reductions.
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