Please refer to BPRD Circular No. 2 of 2016 dated March 02, 2016 regarding the captioned subject.
2. State Bank of Pakistan (SBP) issued the subject guidelines to provide guidance to Banks/DFIs to prepare a comprehensive, transparent and fair remuneration policy that is aligned with risk and responsibilities of financial intermediation, in accordance with the international standards.
3. Post issuance of subject guidelines, SBP has received certain comments on the guidelines. Based on the feedback received from banking industry and subsequent consultation with them, SBP has revised certain Paras of the guidelines/disclosures and implementation timeframe. The revised version of the guidelines is attached as Annexure-I. Consequent to these changes, Banks/DFIs shall now be required to prepare a comprehensive, transparent and fair remuneration policy and Framework setting mechanism latest by 31.12.2017 in phased manner and to disclose the remuneration related matters on annual basis effective from 31.12.2018. Phase/Activity wise implementation schedule is given in Annexure-II.
4. The Banks/ DFIs are advised to ensure compliance of these Guidelines on remuneration practices/disclosures in letter and spirit and strictly adhere to the timeframe given at Annexure-II. Banks/DFIs are also advised to provide a quarterly report, duly approved by Board Remuneration Committee, on the activities undertaken to achieve the corresponding milestones identified in the Annexure-II, to this office within 30 days of the end of corresponding quarter. The first such report shall be submitted for the quarter ending 31st March, 2017.
5. All other instructions on the subject shall remain unchanged.
Please acknowledge receipt.
Encl: Annexure –I & II