refer to BPRD Circular No.36 dated 4th November 1997 on
the above subject.
2. The instructions contained in
paragraph 4 (iii) of the Annexure to the above BPRD Circular
of 1997 is substituted as under:
debt will be limited to a maximum of 50% of the amount of
equity and will also include rated and listed subordinated
debt instruments (like TFCs/Bonds) raised in the capital market.
To be eligible for inclusion in the supplementary capital,
the instrument should
be fully paid up, unsecured, sub-ordinated as to
payment of principal and profit to all other indebtedness
of the bank, including deposits and should not be redeemable
before maturity without prior approval of the SBP. Further
the bank should also have maintained the Minimum Paid up Capital
as prescribed by SBP from time to time.”
3. The banks before issuing any subordinated debt
instruments (like TFCs/Bonds), to qualify for inclusion in
supplementary (Tier-II) capital, will be required to obtain
approval of the State Bank.
The Annexure to this circular contains rules relating to sub-ordinated
debt instruments which shall form part of the regulations
relating to calculation/other requirements on minimum capital.
5. Other instructions on the subject
shall, however remain unchanged.
Please acknowledge receipt.