The Central Bank of Bahrain has opened a consultation on proposed amendments to the Credit Risk Management Module that would introduce new exposure limit requirements for all Bahraini bank licensees. The proposals would replace the existing large exposure and connected counterparty exposure requirements in Chapter CM-2 of the Central Bank of Bahrain Rulebook Volumes 1 and 2. The consultation package includes a questionnaire seeking licensees’ input on how the revised limits would affect credit strategy, underwriting policies and processes, and compliance arrangements, as well as whether any current exposures could breach the proposed limits. The questions indicate changes including an increase in the large exposure limit from 15% to 25%, revisions to exposure limits to related parties, rationalisation of exempt exposure types, and a proposed uniform methodology for capital add-ons for credit concentration risk, with banks asked to calculate both the add-ons and the impact on their capital adequacy ratio. Responses to the questionnaire and any additional comments, including nil responses, are requested by 17 April 2025.
Central Bank of Bahrain 2025-03-18
Central Bank of Bahrain launches consultation on new exposure limits including raising the large exposure cap to 25%
The Central Bank of Bahrain is consulting on amendments to the Credit Risk Management Module, proposing new exposure limit requirements for Bahraini bank licensees. Key changes include increasing the large exposure limit from 15% to 25%, revising related party exposure limits, and introducing a uniform methodology for capital add-ons for credit concentration risk. The consultation seeks input on the impact of these changes on credit strategy, underwriting policies, and compliance.