Regulatory Alerts2015-06-09
Added
Limitation on the Indebtedness of a Borrower and of a group of Borrowers
The Bank of Israel amends Proper Conduct of Banking Business Directive 313 to tighten limitations on the indebtedness of borrowers and groups of borrowers for banking corporations and credit card companies. The definition of capital is narrowed to Tier I capital, and the limit on indebtedness of a banking group of borrowers is reduced from 25 percent to 15 percent of capital. The calculation method for permitted deductions is adjusted to align with Directive 203. These amendments become effective on January 1, 2016, with a transition period for Tier 2 capital inclusion that phases out by December 31, 2018.