The
Presidents/ Chief Executives
All Microfinance Banks
Dear
Sirs/Madam,
Credit
Rating of Microfinance Banks
Prudential Regulation 29 for Microfinance Banks
The
Credit Rating of financial institutions provides the depositors,
investors and creditors an independent assessment as to
the institutions’ capacity to meet their short term
and long term obligations as well their future out look
and enables them to make informed decisions about investment
and deposit etc in the institutions. Considering its critical
importance for overall health of the financial system, as
also to safeguard the interest of prospective investors,
depositors and creditors the rating has already been made
mandatory for all commercial banks and DFIs operating in
the country. As Microfinance Banks are also emerging as
important players in the country’s banking and financial
system, it has been decided to make it mandatory for Microfinance
Banks to get themselves rated. A new Prudential Regulation,
the PR 29, for Microfinance Banks regarding credit rating
of MFBs is therefore being issued:
“
PR –29: CREDIT RATING:
1. The MFBs shall get themselves rated by any of the rating
agencies on the panel of State Bank of Pakistan or any international
microfinance rating agency with prior approval of SBP, within
three years of grant of license by State Bank of Pakistan
to operate as MFB or within one year of commencement of
deposit mobilization services which ever is earlier.
2. The rating shall be an ongoing process and updated on
a continuous basis from year to year within four months
of the close of financial year after the first rating as
stated in the first paragraph. The rating report shall be
submitted to State Bank of Pakistan within 7 days of notification
of the latest rating. The rating shall also be disclosed
to the public within 15 days of the notification of the
latest rating by the rating agency.”