Please
refer to the Rules of Business for NBFIs as amended from time
to time.
It
has been decided with immediate effect to substitute the existing
Rule-9 of the Rules of Business for NBFIs with the following:
9.
Limit on NBFI’s exposure to a single person-----(1)
The total exposure of an NBFI to any single person
shall not at any point in time exceed 30% of the NBFI’s unimpaired
capital and reserves (including revaluation reserves on account
of fixed assets to the extent of 50% of their value) subject
to the condition that the maximum outstanding against fund
based financing facilities do not exceed 20% of the unimpaired
capital and reserves.
(2)
In arriving at per party exposure under this rule:
A)
90% of the following shall be deducted;
(i)
certificates of
deposit / certificates of investment of the borrower
with an NBFI under lien;
(ii)
face value of Federal
Investment Bonds, Pakistan Investment Bonds, Treasury Bills
and National Saving Scheme Securities, lodged by the party
as collateral; and
(iii)
Pak. Rupee equivalent of face value of Special US Dollar
Bonds converted at official rate, lodged by the borrower as
collateral.
B)
50% of repayment bank guarantees accepted as collaterals
of unconditional nature and payable on demand by banks, rated
at least ‘A’ or equivalent by a credit rating agency approved
by the State Bank of Pakistan, shall be deducted.
C)
Weightage of 50% shall be given to guarantees / bonds
other than repayment guarantees
D)
Loans and advances given to the Federal / Provincial
Governments, or guaranteed by the Federal Government and cash
margin retained by an NBFI against guarantees / bonds issued,
shall be excluded.
(3)
Revaluation
reserves under sub-rule (1) above shall be the reserves created
by revaluation of fixed assets of the NBFI. The assets must
be prudently valued fully taking into account the possibility
of price fluctuations and forced sale. Revaluation reserves
reflecting the difference between the historical cost, book
value and the market value will be eligible up to 50% of their
assessed value subject to the condition that the reasonableness
of the revalued amount is duly certified by the external auditors
of the NBFI.
Accordingly,
the definition of equity for the purpose of Rules of Business
for NBFIs as laid down under Part ‘A’ of these rules would
stand modified as under:
‘Equity’
includes Share Capital and Reserves
including revaluation reserves on account of fixed assets
to the extent of 50% of their value.
All
other instructions on the subject shall, however, remain unchange
Please
acknowledge receipt.
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