The Presidents / Chief Executives
All Banks/DFIs

Dear Sirs/ Madam,

ESTABLISHMENT OF SUBSIDIARIES / BROKERAGE
COMPANIES BY BANKS/DFIs

Please refer to BPD Circular No. 1 of 2005 on the captioned subject.

2. Clause (1) of the above mentioned circular states that;
“The Banks/DFIs are required to establish separate subsidiaries if they wish to undertake asset management or conduct brokerage business. However they may at their own discretion, establish other subsidiaries as admissible under the law.”

3. It is clarified that the term “Asset Management” includes the management of a Collective Investment Scheme (i.e. a closed-end fund as well as an open-ended scheme) as defined under the Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003.

4. Other instructions on the subject will remain unchanged.

5. Please acknowledge receipt.