Please refer to BSD Circular No. 19 dated September 05, 2008 on the captioned subject.

2. In view of the transition from Basel-I to Basel-II and to facilitate the banks/DFIs with the requirements of above referred Circular, it has been decided as under:

i) Banks/DFIs shall achieve the minimum Capital Adequacy Ratio (CAR) of 9% on standalone as well as on consolidated basis, regardless of their CAMELS-S rating, latest by 31st December, 2008.

ii) Banks/DFIs shall achieve the minimum CAR of 10% and the requirement of variable CAR by 31st December 2009. The variable CAR requirement, based on the CAMELS-S ratings, will be advised to each bank/DFI separately in due course of time.

iii) CAR calculations shall be based on Basel II and as per the guidelines issued by the State Bank of Pakistan from time to time in this regard.

3. All other instructions, on the subject, shall remain same.

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