Circulars/Notifications - Banking Supervision Department  
 BSD Circular Letter No. 6
March 7, 2002  

All Banks/NBFIs

Dear Sirs,

CIB CLEARANCE

 

It has come to notice of State Bank of Pakistan that banks/NBFIs reject loan requests and even in some cases do not process the loan applications of customers if CIB report of one of the group companies shows overdue on the plea that SBP’s Prudential Regulations/Rules of Business does not allow them to accommodate such customers.

 

2.         In this regard it is clarified that role of CIB is to provide a consolidated picture of a borrower as of a given date based on the information/data supplied by the banks/NBFIs. The Prudential Regulation No. 18 & NBFI Rule of Business No. 23 does not bind a financial institution to turn down the application for financial assistance solely on the basis of over due reported in the CIB report. The regulation clearly stipulates that while due weightage may be given to CIB report the bank/NBFI can consider extending financial accommodation as it may deem fit if the requested credit facility or transaction is viable as an acceptable credit risk.

 

3.          Banks/NBFIs are, therefore, advised to take due care in processing of application for financial accommodation in a broader perspective.

 

Please acknowledge receipt.



Yours faithfully,
(Jameel Ahmad)
Senior Joint Director
       
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