The
Chief Executives,
All Banks / DFIs.
Dear
Sirs / Madam,
PRUDENTIAL REGULATIONS
In exercise of the powers vested in it under the Banking
Companies Ordinance, 1962, the State Bank of Pakistan is
pleased to issue the following three separate sets of Prudential
Regulations:
i)
Prudential Regulations for Corporate / Commercial Banking
ii) Prudential Regulations for SMEs Financing
iii) Prudential Regulations for Consumer Financing
2.
The Prudential Regulations for Corporate/Commercial Banking
have been divided into four sections with prefixes “R”
for Risk Management, “G” for Corporate Governance,
“M” for Know Your Customer & Anti Money
Laundering and “O” for Operations. The Prudential
Regulations for SME Financing contain only the regulations
pertaining to Risk Management listed under the prefix “R”,
and the other areas viz. Corporate Governance, Know Your
Customer & Anti Money Laundering and Operations will
be governed by Prudential Regulations as listed for Corporate/Commercial
Banking under “G”, “M”, and “O”
respectively. Similarly, Corporate Prudential Regulations
in categories “G”, “M” and “O”
will be applicable in case of Consumer Financing as well.
However, in case of Prudential Regulations for Consumer
Financing, in addition to regulations pertaining to Risk
Management under prefix “R”, some regulations
pertaining to Operations (specific to each product) under
the prefix “O” have been prescribed which will
also be binding on banks/DFIs in case of Consumer Financing.
3.
These Prudential Regulations do not supercede directives
and instructions issued by the State Bank of Pakistan in
respect of areas not covered under above regulations, which
also include the instructions on penalties.
4.
In order to provide sufficient time to banks/DFIs to comply
with these Prudential Regulations, the same shall become
effective from January 1, 2004. The new sets of Prudential
Regulations have been placed at SBP web-site http://www.sbp.org.pk
which may be accessed / downloaded for consultation and
ease of reference at any time. In case of any clarification,
the banks/DFIs may approach the BPD help desk at http://www.sbp.org.pk/bpd/helpdesk.asp.
5.
Banks / DFIs are advised to ensure circulation of these
regulations among all their offices / branches for meticulous
compliance in letter and in spirit. Non-compliance of Prudential
Regulations will lead to punitive action under the relevant
provisions of Law. It may be noted that the transactions
structured in a manner to circumvent these Prudential Regulations
will tantamount to violations of Prudential Regulations
and shall be dealt with accordingly.
6.
Please acknowledge receipt.