5.1 Article 147(5A)(d) of the Credit Risk: Internal Ratings Based Approach (CRR) Part specifies that, in order for an exposure to be treated as a qualifying revolving retail exposure, it needs to exhibit relatively low volatility of loss rates. The PRA expects firms to assess the volatility of loss rates for the qualifying revolving retail exposure portfolio relative to the volatilities of loss rates of other relevant types of retail exposures for these purposes. Low volatility should be demonstrated by reference to data on the mean and standard deviation of loss rates over a time period that can be regarded as representative of the long-run performance of the portfolios concerned.

5.2 Article 147(5A)(e) of the Credit Risk: Internal Ratings Based Approach (CRR) Part specifies that in order for an exposure to be treated as a qualifying revolving retail exposure, this treatment should be consistent with the underlying risk characteristics of the sub- portfolio. The PRA considers that a sub-portfolio consisting of credit card or overdraft obligations will usually meet this condition, and that it is unlikely that any other type of retail exposure would do so. If a firm wishes to apply the treatment in Article 147(5A) of the Credit Risk: Internal Ratings Based Approach (CRR) Part to product types other than credit card or overdraft obligations, the PRA expects it to discuss this with the PRA before doing so.