State Bank of Pakistan

	In order to encourage financing activities in the economy, it has been decided to include M/s. GuarantCo Limited in Para 1(C) of Annexure-I of Prudential Regulations for Corporate/Commercial Banking. Accordingly, the said Para is amended as follows with immediate effect:
1.	“85% of the unconditional financial guarantees accepted as collateral and payable on demand by banks/DFIs, (rated at least ‘A’ or equivalent by a recognized rating agency) shall be deducted. Same weightage to the guarantees of similar nature issued by the International Finance Corporation (IFC), Commonwealth Development Corporation (CDC) Deutsche Investitions und Entwicklungsgesellschaft mbH (DEG), Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V (FMO), GuarantCo Limited and Asian Development Bank (ADB) shall also apply. However, in respect of above-mentioned banks/DFIs or entities whose guarantee has been accepted as collateral, the beneficiary bank/DFI shall immediately report to SBP a) Any instance where the guarantee issuing bank/DFI or entity fails to honour the claim within 20 working days of the date on which the guarantee is invoked, b) Any downgrade in the rating of guarantee issuing bank/DFI or entity below ‘A’.”
2.	All other instructions on the matter will, however, remain unchanged.