Global financial crisis has highlighted the importance of enhanced supervision of systemically important financial institutions. Accordingly, the standard setting bodies and supervisors across the globe are continuously reviewing the supervisory frameworks and reshaping supervisory policies for enhancing resilience of the systemically important banks. In line with emerging best practices, particularly the indicator based approach of Basel Committee of Banking Supervision (BCBS), State Bank of Pakistan (SBP) has developed a framework for designation and supervision of Domestic Systemically Important Banks (D-SIBs). The framework for D-SIBs is attached as Annexure-A.

2. The D-SIBs framework specifies the methodology for identification and designation of D-SIBs, enhanced regulatory and supervisory regime and implementation guidelines. Under the framework, SBP would identify the sample of D-SIBs and announce designation by the end June each year. The designated D-SIBs shall be required to meet both higher loss absorbency requirements and enhanced supervisory requirements. Remaining banks in the sample of D-SIBs shall only meet the enhanced supervisory requirements.

3. First designation of D-SIBs shall be made by end June 2018. The designated D-SIB(s) shall be required to meet the enhanced regulatory and supervisory requirements by end March 2019.

4.  Please acknowledge receipt.

Encl. Annexure - A - Framework for Domestic Systemically Important Banks (D-SIBs)