What is Non-conforming Exposure for Large loan for a Bank?

Answer:

If an exposure is within the  Large loan limit of the bank ] when made but subsequently exceeds the limit, the exposure will be treated as ‘non-conforming’ which may arise from any of the following circumstances:

i) the bank’s capital declines;

ii) the borrower merges or forms a common enterprise with another borrower;

iii) the bank merges with another bank which also holds exposures to the borrower;

iv) capital rules or the lending limits undergo changes;