Further Options under the ASA – Option 1

Under the ASA Option 1, banks may aggregate retail and commercial banking using a common beta of 15%, instead of 12% and 15%, respectively, as prescribed under the Standardised Approach (SA). For the other six business lines, the relevant beta factors as prescribed under the SA are used. The exposure indicator remains the volume of loans and advances for commercial and retail banking and gross income for the other six business lines.

Further Options under the ASA – Option 2

Under Option 2, banks may maintain the SA beta factors of 12% and 15% for retail and commercial banking and aggregate the other six business lines with a beta factor of 18%. The volume of loans and advances is used as the exposure indicator for commercial and retail banking. Gross income is used for the other six business lines. Banks undertaking predominantly traditional banking activities, such as retail and commercial banking, and unable to segregate their gross income according to business lines may find it useful to adopt this option.

Further Options under the ASA – Option 3

Under Option 3, banks may aggregate retail and commercial banking with a beta factor of 15% and the other six business lines with a beta factor of 18%. The volume of loans and advances is used as the exposure indicator for retail banking and commercial banking. Gross income is used for the other six business lines.