• The Group Definition, given in Prudential Regulations for Corporate & Commercial Banking, and SME Financing, at serial No.14 and Serial No.12 respectively, has been replaced with the following:

  “Group means persons, whether natural or juridical, if one of them or his dependent family members or its subsidiary have control or hold substantial ownership interest over the other. For the purpose of this:

(a) Subsidiary will have the same meaning as defined in sub-section 3(2) of the Companies Ordinance, 1984 i.e. a company or a body corporate shall deemed to be a subsidiary of another company if that other company or body corporate directly or indirectly controls, beneficially owns or holds more than 50% of its voting securities or otherwise has power to elect and appoint more than 50% of its directors.
(b) Control refers to an ownership directly or indirectly through subsidiaries, of more than one half of voting power of an enterprise.
(c) Substantial ownership / affiliation means beneficial share holding of more than 25% by a person and / or by his dependent family members, which will include his/her spouse, dependent lineal ascendants and descendants and dependent brothers and sisters. However, shareholding in or by the Government owned entities and financial institutions will not constitute substantial ownership / affiliation, for the purpose of these Prudential Regulations.”


• With respect to Liquid Assets, defined in Prudential Regulations for Corporate & Commercial Banking, and SME Financing, at serial No.15 and Serial No.13 respectively, the following new Para, after para 2, may be added to the existing definition;
  “The Inter-branch Indemnity/Guarantee issued by the bank’s overseas branch in favor of its sister branch in Pakistan, would also be treated at par with Liquid Assets, provided the bank is rated ‘A’ and above or equivalent either by Standard & Poors, Moody’s or Fitch-Ibca. The indemnity for this purpose, should be similar to a guarantee i.e. unconditional and demand in nature.”
  

Para 1.A(d) & (h) of Regulation R-6 have been replaced with the following:

Para 1.A(d)
“take exposure on any person against the shares/TFCs issued by that person or its subsidiary companies. Further, for the purpose of this clause, person shall not include individual.”

Para 1.A (h)
“take exposure against unsecured TFCs or non-rated TFCs or TFCs rated below ‘BBB’ or equivalent. Exposure may, however, be taken against unsecured/ subordinated TFCs, which are issued by the banks/DFIs for meeting their minimum capital requirements, as per terms and conditions stipulated in BSD Circular No. 12 of August 25, 2004.”