IBANK 6.4.6 Capital Charges — Simplified Approach

(1) The capital charge for commodities risk of an Islamic banking business firm is the sum of:
(a) 15% on the firm's overall net position, long or short, in each commodity; and
(b) 3% on the firm's gross position in each commodity.
(2) Gross position, of a firm in a commodity, is the sum of the absolute values of all short positions and all long positions of the firm, regardless of maturity.
(3) The firm must use the current spot price to calculate its gross position in commodity Shari'a-compliant hedging instruments.
Derived from QFCRA RM/2015-2 (as from 1st January 2016).