The Presidents/Chief Executives
All Banks/DFIs

Dear Sirs,

Minimum Capital Requirements (MCR) for Banks and DFIs

          Please refer to BSD Circular No. 19 dated September 05, 2008, BSD Circular No.7 dated April 15, 2009, and BPRD Circular No. 10 dated October 17, 2014, regarding the captioned subject.

2.      Keeping in view the increased operating costs to establish and manage financial institutions on sustainable basis, it has been decided to enhance the Minimum Capital Requirement (MCR) for new and existing banks, foreign bank branches and DFIs in the following manner:

         i. Locally Incorporated Banks: The MCR for banks including Islamic banking subsidiaries of banks shall be PKR                       20 billion.

         ii. Foreign Banks' Branches: The foreign banks (FBs) with operations in branch mode in Pakistan will be required to               maintain assigned capital (net of losses) at the following levels:

              (a) FBs with up to 5 branches will be required to maintain assigned capital of at least PKR 5 billion.

              (b) FBs operating with 6 to 50 branches will be required to maintain assigned capital of at least PKR 10 billion.

         iii. DFIs: The MCR for DFIs shall be PKR 10 billion.

3.     The existing banks and DFIs shall meet the above MCR by December 31, 2030.

4.      The statutory reserves created in line with Section 21 of Banking Companies Ordinance 1962 will be eligible for inclusion in MCR, in addition to the already prescribed items as per BPRD Circular No. 06 of 2013. The statutory reserves accounted towards MCR shall not be withdrawn without prior approval of SBP.

5.      All other instructions, on the subject, shall remain the same.

6.      Please acknowledge receipt.