SBP revises equity limit to 10%

The SBP amended conditions and limits for banks


APP May 25, 2021
It is a misconception that SBP will be empowered unabatedly through the proposed Act to share financial or non-financial private information with any entity, particularly outside the country, said the Ministry of Finance. PHOTO: FILE

KARACHI:

The State Bank of Pakistan (SBP) has revised the maximum limit of equity of a bank or development finance institution (DFI) for issuing guarantee against the back-to-back/ counter-guarantee by a foreign unrated, or under-rated bank or DFI. Following the revision, the limit has risen to 10%. Through a circular issued by the Banking Policy and Regulations Department (BPRD) on Monday, the central bank has revised Para 2 of Regulation R-7 of Prudential Regulations for corporate/ commercial banking. The SBP amended conditions and limits for banks or DFIs for issuing guarantee against the back-to-back/ counter-guarantee of an unrated or rated below ‘A’ bank/DFI that is situated in a foreign country.

Published in The Express Tribune, May 25th, 2021.

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