Decree of the National Bank of Slovakia on Limitations Rules of Concentration of Assets

(Notification of the National Bank of Slovakia No. 210/2001 Coll. on issue of the Decree on Limitations Rules of Concentration of Assets of Banks towards Other Subjects)

This decree of the National Bank of Slovakia (the "NBS") executes Sec. 13 (2) of the Act No. 21/1991 Coll. on Banks, as amended (the "Act") and stipulates rules for limitations of:

1. liabilities, receivables and other equity rights and obligations of  banks towards particular generally specified subjects and groups of economically interconnected subjects (the "concentration of assets of the bank") in proportion to the capital and reserves of the banks; and
2. amount of concentrations of banks' assets, value of which equals, or is higher than, 10% of the capital and reserves of the banks (the "large concentration of banks' assets"), in proportion to the capital and reserves of the banks, which the banks observe pursuant to Sec. 13 of the Act.

According to Sec. 13 of the Act, the amount of liabilities, receivables and other equity rights and obligations of banks arisen at the performance of banking activities towards particular generally specified bank subjects, eventually a group of economically interconnected subjects, value of which equals, or is higher than, 10% of the capital and reserves of the banks, cannot exceed stipulated limitations in proportion to the capital and reserves of the banks.

The decree provides for definitions of several relevant terms, such as receivable, other equity right, liability, securing of receivable and subordinated debt.

The decree stipulates that concentration of banks' assets towards one subject or a group of economically interconnected subjects may be at maximum 25% of the capital and reserves of the bank. In case of the concentration of bank's assets towards a subject which controls the bank, or which is controlled by the bank, or towards a group of economically interconnected subjects, if the controlling or controlled subject is pursuant to this decree such bank, can be at most 20% of its capital and reserves.

The amount of all concentrations of bank's assets cannot be higher than 800% of the capital and reserves of the bank.

The Decree of the National Bank of Slovakia No. 3/1994 dated 31 January 1994 on Loan Exposure of Banks as amended by the Decree of the National Bank of Slovakia No. 4/2000 dated 14 February 2000 is hereby cancelled.

This decree is in force from 20 June 2001.

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