1. 105) Retail deposits include both term deposits (maturity over 1 day) and current/savings/at call deposits which banks are under contractual obligation to pay immediately.
2. 106) Retail deposits are separated into stable and less stable deposits.
   
   Stable retail deposits receives 5% run off & less stable receives 10% run off
3. 107) Current retail deposits are considered stable if:
   • ▪ They are resident deposits and,
   • ▪ A relationship with the customer has been well established, for example the customer has been dealing with the bank for over 1 year; or
   • ▪ The customer uses the account for transactions such as salary being deposited in the account, paying bills and standing orders.
4. 108) Retail term deposits which are maturing within the 30 day period are classified as stable if:
   • ▪ They are resident deposits and,
   • ▪ A relationship with the customer has been well established, for example the term deposit has a history of being rolled over at maturity with the bank or the relationship has been established for over 1 year with the customer.
5. 109) No more than 60% of retail deposits maturing within 30 days can be classified as stable. This cap will only be applicable during the transition period until 1 January 2019 after which all banks are expected to be in a position to comply with the Basel III requirements in full.
6. 110) All other retail deposits that do not meet the criteria for classification as “stable” are considered less stable retail deposit and receive 10% run off factor against them.
7. 111) Deposits from small and medium size entities (SMEs)⁵ can be treated as retail deposits (and sections (107)‎ to 110)‎ apply to them), if their deposit amount is less than AED 20⁶ Million.
8. Unsecured deposits from non-financial corporates – 40% run off for Non-operational & 25% run off for operational.
9. 112) Unsecured wholesale deposits (current and term) are deposits from legal entities⁷ that are not collateralized by assets owned by the bank and are not sourced from a financial institution⁸. It includes deposits sourced from Sovereigns, Public Sector or Government Related entities. Obligations related to derivative contracts are explicitly excluded.
10. 113) It includes all funding that is callable within the 30 day horizon according to its earliest possible contractual maturity date, including those that are exercisable at the investor's discretion.
11. 114) Unsecured wholesale deposits from non-financial institutions are separated into operational and non-operational wholesale deposits. Operational wholesale deposits have one or more of the following characteristics:
    • ▪ The customer is reliant on the bank to perform payments, clearing, collections, custody, cash management (and) or payroll supported by a legally binding contractual agreement. The bank will have to prove reliance.
    • ▪ The deposits are by-products of the underlying services provided by the banking organization and not sought out in the wholesale market in the sole interest of offering interest income.
    • ▪ The deposits are held in specifically designated accounts and priced without giving an economic incentive to the customer to leave any excess funds.
12. 115) It is understood that exact segregation of operational and non-operational accounts is operationally challenging for banks. The Central Bank expects banks to use their best endeavors and sound judgment in the process. Banks must also undertake a continuous upgrading/improvement of systems and MIS to ensure that by the final implementation date of 1 January 2019 they can fully comply with the requirements of Basel III in this respect. Any deliberate manipulation of the classification will result in all wholesale deposits being classified as non-operational. For example, banks would be expected to ascertain the ‘normal’ balance in these accounts for operational purposes and exclude those balances that are in excess.
13. 116) No more than 40% of total wholesale deposits maturing in one month can be classified as operational.
    Banks who operate the LCR will be expected to adjust their liability products over time, both retail and corporate, so that they can more directly reflect the characteristics of the Basel III requirements. Once this is achieved the 40% ceiling will be lifted.
14. 117) All other deposits from legal entities, including those from SMEs in excess of AED 20 million are non-operational and attract a run-off factor of 40%.
    
    Unsecured wholesale funding from financial institutions – Operational 25% run off, Non-operational at 100% run off
15. 118) This category includes non-collateralized deposit sourced from banks, insurance companies, brokers, securities firms (and the affiliates of these companies) as well as NCDs, Bonds, MTNs, CPs and other unsecured debt instruments issued by the bank and are maturing within the 30 day stress period. These are also separated into operational and non-operational deposits depending on their characteristics.
16. 119) Operational deposits from financial institutions receive 25% run off against them and have the all following characteristics:
    • ▪ The criteria is met as prescribed above for deposits from non-financial operational accounts
    • ▪ The deposits do not arise from correspondent banking, or from the provision of prime brokerage services.
    • ▪ If the deposit placed by a bank receives a 25% run off against it, the depositing bank receives 0% inflow for it. The Central Bank will ensure this treatment is applied when conducting its onsite and offsite reviews.
17. 120) A run off factor of 100% is assigned to all non-operational financial services deposits maturing within 30 days and that do not meet the above characteristics.

⁴ Defined as deposits from individuals (natural persons)
⁵ Small and medium enterprises refer to legal entities that have an annual turnover of less than AED 75 million
⁶ The AED 20 million limit is to be determined on a relationship level.
⁷ Excludes SME deposits that fall under 111)‎
⁸ Financial institution includes banks, insurance companies, brokers and their affiliates.