The
Chief Executives,
All Banks / DFIs.
Dear
Sirs/Madam,
MINIMUM
RATING OF BANKS REQUIRED FOR ACCEPTANCE OF THEIR COUNTER-GUARANTEE
BY SCHEDULED BANKS IN PAKISTAN: R-7 (PARA 2)
Please
refer to the Prudential Regulations issued vide BPD Circular
No.35 dated 28th October, 2003.
2.
It has been decided to amend R-7, Para 2 of the Prudential
Regulations for Corporate/ Commercial Banking as under:
"The requirement of security can also be waived by
the banks / DFIs in cases of guarantees issued to Pakistani
firms and companies functioning in Pakistan against the
back to back / counter guarantees of branches of guarantee
issuing bank / DFI or banks / DFIs rated at least ‘A’
or equivalent by a credit rating agency on the approved
panel of State Bank of Pakistan or Standard & Poor,
Moody's, and Fitch-Ibca. Besides, in case the counter-guarantee
issuing bank is situated in a foreign country, the rating
of at least 'A' or equivalent by a local credit rating agency
of the respective country shall also be acceptable, provided
the guarantee issuing bank in Pakistan is comfortable with
and accepts the counter-guarantee of such foreign bank.
The
banks / DFIs are encouraged to set limits for acceptance
of guarantees issued by other banks / DFIs."
3.
All other instructions on the subject shall, however, remain
unchanged.