Circulars/Notifications - Banking Policy & Regulations Department  
 BPRD Circular Letter No. 47 of 2020
November 20, 2020

The Presidents/Chief Executive Officers,
All Banks/DFIs

Dear Sir/Madam

Internal Credit Risk Rating System

Please refer to BSD Circular No. 8 of October 29, 2007 and BSD Circular No. 1 of January 02, 2013 on the subject wherein industry has been advised to develop and implement appropriate internal credit risk rating models/ scorecards to measure the credit risk.

2. In this regard, to facilitate the banking industry with respect to implementation and reporting of internal credit risk rating models/ scorecards for the newly emerging sector of “Low Cost Housing in Pakistan”, banks and DFIs are allowed exemption from the applicability of above referred instructions until September 30, 2022.  However, during this time, banks and DFIs will start the development of appropriate internal risk rating models/ scorecards to measure the credit risk of their respective Low Cost Housing Finance Portfolios.

3. Banks and DFIs shall also submit a time bound and stepwise plan to complete the development of such models/ scorecards within the above mentioned timeline. The subject plans shall be submitted within one month from the issuance of these instructions and the industry’s progress there against will be monitored by SBP.

4. All other instructions on the subject shall, however, remain unchanged.

5. Please acknowledge receipt.

Yours truly,


(Muhammad Akhtar Javed)

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