The Presidents/ Chief Executive Officers

All Banks/ DFIs

Dear Sir /Madam,

Risk weight for Unrated Large Corporates – Implementation of Basel Capital Framework

Please refer to BPRD Circular Letter No. 25 of July 23, 2014 wherein the risk weight on all unrated private sector borrowers with aggregate outstanding exposure from financial institutions of Rs. 3.0 billion or above, net of liquid assets, was to be risk weighted at 125% effective from December 31, 2014.

However, on representation of the industry, it has been decided to implement the above instructions as follows:

1. Effective from December 31, 2014, all unrated private sector corporate entities with aggregate outstanding exposure from financial institutions (both fund-based and non-fund based) of Rs. 5.0 billion or above, net of liquid assets, will attract risk weight of 115%.
2. Effective from December 31, 2015, all unrated private sector corporate entities with aggregate outstanding exposure from financial institutions (both fund-based and non-fund based) of Rs. 3.0 billion or above, net of liquid assets, will attract risk weight of 125%.

All other instructions on the subject shall remain unchanged.

Please acknowledge receipt.