Circulars/Notifications - Banking Supervision Department  
 BSD Circular No. 22
June 1st, 2001 

The Chief Executives,
All Banks/NBFIs.

Dear Sirs/ Madam,

FINANCING FACILITIES AGAINST SHARES

PRUDENTIAL REGULATION-VI / RULE-10(ii) OF NBFIs RULES OF BUSINESS

Please refer to the instructions contained in para 3 of BPRD Circular No. 34 dated October 20, 1999 and BPRD Circular No. 36 dated October 27, 1999 in terms of which banks, for acquiring / purchasing shares of NBFIs, including Modarabas and Leasing Companies and NBFIs for acquiring / purchasing shares of private banks/ other NBFIs including Modarabas and Leasing Companies were, interalia, required to obtain prior clearance from the State Bank of Pakistan.

It has now been decided to allow banks to acquire / purchase upto 5% of the total paid-up shares of any non-bank financial institution without any prior approval from the State Bank of Pakistan. Similarly any NBFI may acquire upto 5% of the total paid-up shares of any commercial bank without any prior approval from the State Bank of Pakistan.

In case of acquisition / purchase above 5% of the total paid-up shares, banks / NBFIs should approach the State Bank of Pakistan for seeking its prior clearance as hithertofore.

All other instructions on the subject shall, however, remain unchanged.

           

Please acknowledge receipt.

Yours faithfully,
(KAZI ABDUL MUKTADIR)
Director
       
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