The Presidents / Chief Executives
All Banks/DFIs

Dear Sirs/Madam, 

RISK MANAGEMENT FRAMEWORK –
DISCLOSURE IN ANNUAL ACCOUNTS

          The State Bank has issued detailed guidelines on Risk Management to banks/DFIs vide its BSD Circular No.7 dated 15 th August, 2003. In order to enhance disclosure and to meet information needs of the stakeholders, it has
been decided that effective from the Accounting Year ended 31 st December, 2004, all banks and DFIs will include a comprehensive paragraph under the heading “Risk Management Framework” in the Directors’ Report in their
Annual Accounts. This paragraph will cover a) the overall / broad plan to meet the SBP’s guidelines on risk management; b) the status and details of action / steps taken under the bank’s individual plan to implement the SBP’s
guidelines on Risk Management; and c) the indicative timeframe to achieve completion of their plan i.e. full compliance of SBP’s guidelines. The Disclosure so made in the Directors’ Report will be cross-checked / validated by the SBP inspectors during their routine on-site inspection. 

          Please acknowledge receipt.