The CL given by any one Bank will be shared equally by all the CC issued by the same Bank

Example, I apply for VS and is given say RM50K in CL

I apply for the Ilhlawan and I will also be given RM50K CL but it does not mean that I can spend RM50K on both cards, thus incurring RM100K outstanding.

The RM50K is to be shared between the 2-cards so long as max of RM50K is not breached by me in any combination spending.

okay, good for you but you should clarify as I said, I used to have 2 cards from RHB also, both say CL is say RM60K, via a separate letter, I was informed that but total CL to me is still RM60K and not RM120K

Have u updated Maybank on your latest salary


FYI, under Basel 3, there is capital charges for unutilised CL for CC.

Hence, if u are not regularly high roller or potential high roller, banks will start to reduce CL going forward.

Edited - Apologies, got my divided and multiplied terbalik.

A layman simple definition is as follows:

Banks are required to maintain a minimum amount of Capital based on its Risk Weighted Assets that it holds.

This Risk Weighted Assets are derived from a Capital Charge multiplied by the Assets of a Bank which are mainly its Debtors (Borrowers) in form of Loans given.

A Bank’s capital can be in the form of Share Capital, Share Premium, Retained Earnings and other deductibles which are too complicated to explain. So, for this example, just use the above Share Capital, Share Premium, Retained Earnings as definition of Capital.

The main Capital Charge formulae is as follows:

For Personal / Unsecured Loans = 100% of the said amount
For Residential Mortgages = 35% of Loan Amount if the LTV is <80%
For other Residential Mortgages = 50% of Loan Amount
For unutilized Credit Limit in Credit Cards = 20% of balance Credit Limit

So, say for instance, the Bank has the following Loan portfolio

Housing Loans with LTV below 80% = RM500 mln
Housing Loans with LTV above 80% = RM800 mln
Personal Loans = RM200 mln
Credit Cards

Total CL = say RM60,000 * 10,000 cards = RM600 mln
Average Credit Utilised = RM10,000 * 10,000 cards = RM100 mln
Average unutilized Credit Limit = RM500 mln

Total Risk Weighted Assets

Mortgages with LTV < 80% = RM500 mln * 35% = RM175 mln
Mortgages with LTV > 80% = RM800 mln * 55% = RM400 mln
Personal Loans = RM200 mln * 100% = RM200 mln
CC – utilized Credit Limit = RM100 mln * 100% = RM100 mln
CC – unutilized Credit Limit = RM500 mln * 20% RM100 mln

Total RWA = RM975 mln

The min Capital Adequacy is Capital / RWA = 8%, so min Capital required = RM12,187.5 RM78 mln

Now, if the Credit Limit for the CC was only at RM30,000, the total RWA wouild be reduced to RM915 mln and the minimum capital required by the Bank will be reduced to RM11,437.5 RM73.2 mln or lowered by RM750 RM4.8 mln (RM30,000 * 10,000 cards * 20% / * 8%)

Hence, CC limit places heay burden on a Bank’s total Capital

That’s why smaller Banks like Affin don’t want to issue many CC

This post has been edited by cfa28: Nov 7 2014, 12:53 PM

Apologies sifu, edited my post cos got my divided and multiplied terbalik.

Typing too fast, this is what my friend in Bank Risk Management told me

For every RM8 in Risk Weighted Assets (Loans), Bank must ensure additional RM1 in Capital

My earlier example, I reversed the numerator and denominator



This post has been edited by cfa28: Nov 7 2014, 12:59 PM