Please
refer to Prudential Regulations for Microfinance Banks and
instructions issued from time to time in this respect.
The
following Prudential Regulations have been amended as given
under:
Regulation 10
Maximum Loan Size and Disclosure of Basic Terms &
Conditions of Financial Products:
This
regulation has been replaced as:
Housing
Loans:
Maximum Loan size up to Rs. 500,000/- to a single borrower
with household annual income up to Rs. 600,000/-. However,
at least 60% of housing loan portfolio of an MFB should
be within the loan limit of Rs. 250,000/- or below.
General Loans (other than housing loans):
Maximum Loan size up to Rs. 150,000/- to a single borrower
with household annual income (net of business expenses)
up to Rs. 300,000/-
The
MFB shall ensure that the loan amount is commensurate with
the business requirements and repaying capacity of the borrower.
The MFB shall also ensure that the loans equivalent to the
maximum limit are extended only to those borrowers who have
established track record of satisfactory repayment. The
MFB shall formulate well-defined credit policy covering
inter alia maximum lending limits, basis for loan pricing,
determination of borrowers’ repayment capacity, repayment
period, Collaterals etc.
Regulation
11
Maximum Exposure of a borrower from MFBs / MFIs / Banks/
Other Financial Institutions:
This
regulation has been amended as:
The
MFB shall develop internal policy to monitor the overall
exposure of its borrowers so as to manage credit risk and
also minimize the borrowers’ over-indebtedness risk.
At
the time of granting facility, MFBs shall obtain a written
declaration on the prescribed format attached as Annexure–G
from the borrower divulging details of various facilities
already obtained from other MFBs / MFIs / Banks / other
Financial Institutions. The MFB shall ensure that total
exposure of its clients does not exceed their total repayment
capacity as determined under the criteria laid–out
in the MFB’s credit policy. The maximum limits of
the borrowers’ aggregate exposure will be Rs. 150,000/-
for general loans, and Rs. 500,000/- for housing loans.
Further,
before allowing any facility exceeding Rs.50,000/-, the
MFBs shall obtain a credit report from the Credit Information
Bureau of State Bank of Pakistan, or from any other Credit
Information Bureau of which they are a member. The report
should be given due weightage while making credit decision.
Regulation
12
Loans Classification and Provisioning Requirements:
Loans overdue by 30 days or more, but less than 60 days
are classified as ‘Other Assets Especially Mentioned
- OAEM’, and will require no specific provision.
Loans overdue by 60 days or more, but less than 90 days
are classified as ‘Sub-standard’, and will require
a specific provision of 25% of outstanding principal net
of cash collaterals.
Regulation
30
Definition of Poor Person:
This
Regulation has been deleted as the borrowers’ eligibility
criterion is now given in Prudential Regulation No. 10.
Accordingly,
the existing Regulations 31 & 32 have been renumbered
as Regulation 30 and 31 respectively.