Guidelines on the Differential Premium Systems - PIDM

Ref No DI/GL2-A1/2011(DPS) Issued on 4 March 2011TITLE<strong>Guidelines</strong> on The Differential Premium Systems3.5.1.5 The provisions for a new member shall be applicable to Islamic banking scheme,which is newly established by conventional banks from the assessment year 2011onwards.3.5.1.6 However, the new member provisions shall not be applicable to Islamic banks thathave been transformed from an Islamic banking scheme of a conventional bankgiven that it has been in operation for the past years.3.5.2 Amalgamation3.5.2.1 Amalgamation is defined as acquisition of one or more members or merger of two ormore members. Amalgamated member means a member formed from theamalgamation of two or more members, has completed the process of transferringassets and liabilities and has started to operate as a new entity. Amalgamatingmember means a member that has undergone an amalgamation process, resulting inthe formation of an amalgamated member.3.5.2.2 For a member formed by an amalgamation that occurred on or before 31 May of theassessment year, the following provisions should be applied in determining thequantitative and qualitative score of an amalgamated member:(a)Where an amalgamated member is formed before or on 31 December of thepreceding assessment year, the scores shall be based on quantitativeinformation, supervisory rating and other information of the amalgamatedmember as at 31 December of the preceding assessment year.(b)Where an amalgamated member is formed after 31 December of thepreceding assessment year, the highest of the quantitative scores based oninformation as at 31 December of the preceding assessment year assigned toeach of those amalgamating members shall be assigned to the amalgamatedmember. The scores of supervisory rating and other information of theamalgamating member whose scores were used in scoring the amalgamatedmember’s quantitative criteria shall also be applied.3.5.2.3 For a member with insufficient information to calculate certain criteria, the scores ofthese criteria shall be assigned proportionately according to paragraph 4.5(Insufficient Quantitative Information).Page 17