New ‘prudential statements’ introduced

Require returns be submitted every half year for risks assessment.


Ppi September 14, 2012

KARACHI: The State Bank of Pakistan (SBP) has introduced a set of statements required to be submitted by banks in order for it to be able to effectively monitor and assess risks posed by the latter’s relationship with associated undertakings.

The new ‘prudential returns/statements’ have been introduced for all banks incorporated in Pakistan. They include the details of related parties; the details of exposures to and from related parties; the details of related party dealings and transactions; the details of equity exposures; the details of capital adequacy of subsidiaries; and the latest available financial statements of subsidiaries and associates.

The SBP has advised all banks to submit these statements on a half-yearly basis, from the half-year ending June 30, 2012 and onward. These returns should reach the Banking Surveillance Department of the SBP within 45 days of the close of each half year ending June 30 and December 31, the SBP has said in a release issued on Thursday.

However, banks may submit returns for the half-year ending June 30, 2012 within 45 days from the date of notification; ie September 13, 2012.

One of the core principles of effective banking supervision necessitates consolidated supervision of banks covering all risks; whether they are carried on the banks’ own books, or on the books of associates. “It is, therefore, imperative to monitor and assess the risks posed by such relationships,” the SBP said in its notification.

Published in The Express Tribune, September 14th, 2012.

 

COMMENTS

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ