It has been decided with immediate effect to substitute the
Prudential Regulation-III with the following:
1.
No bank shall provide financing facility in any form of a
sum exceeding Rs.100,000/- (Rupees one hundred thousand only)
and in case of credit cards Rs.500,000/- (Rupees five hundred
thousand only) to any one individual or person without obtaining
realizable securities of the value not below the outstanding
amount. Financing facilities granted without securities including
those granted against personal guarantees shall be deemed
as ‘clean’ for the purpose of credit regulations. Provided
further that:–
(a)
at the time of granting a clean facility, banks shall obtain
a written declaration to the effect that the borrower in his
own name or in the name of his family members, has not availed
of such facilities from other banks so as to exceed the prescribed
limit of Rs.100,000/– and in case of credit cards Rs.500,000/-
in aggregate;
(b)
no clean facility shall be granted to frustrate the objective
of credit restrictions in force for the time being; and
(c)
the purpose for which a clean facility is sanctioned shall
be expressly stated in the sanction letter.
2.
For the purpose of this regulation following shall be excluded/
exempted from the per party limit of Rs.100,000/– on clean
facilities:
a)
Facilities provided to finance the export of commodities eligible
under Export Finance Scheme.
b)
Financing covered by the Export Credit Guarantee Insurance
Scheme.
c)
Loans/ advances given to the employees of a bank in accordance
with their entitlement.
d)
Loans/ advances exempted by the State Bank of Pakistan from
time to time.
3.
The aggregate exposure of a bank against all its clean facilities
shall not, at any point of time, exceed the amount of the
bank’s Capital and General Reserves (free of losses).
4.
Failure to comply with the above instructions shall render
the bank and official(s) concerned liable for fines under
the Banking Companies Ordinance, 1962.
Please
acknowledge receipt.
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