The Presidents / CEOs

All Microfinance Banks

Dear Sir,

Addition in Prudential Regulations (PR) No. 17 for Microfinance Banks (MFBs)

1. Please refer to Prudential Regulation No. 17 for Microfinance Banks (MFBs). Following instructions have been added to the aforesaid regulation with immediate effect under a separate head of “Record Retention”.
2. The records of transactions and identification data should be maintained by MFBs in systematic manner with exactness of period of preservation. For the purpose, following minimum requirements shall apply;

i). Identification Record: MFBs shall keep record on the identification data obtained through the Customer Due Diligence (CDD) process, account files and business correspondence for at least five years following the termination of the business relationship.

ii). Transactions Record: MFBs shall maintain all necessary records on transactions, both domestic and International, for at least five years following completion of the transaction. Such record must be sufficient for reconstruction of individual transactions so as to provide, if necessary, evidence for investigation or prosecution of criminal activity.

The examples of the necessary components of transaction record may include: customer’s name (beneficiary’s name), address, nature and date of transaction, type and amount of transaction, currency involved, type and identification of any account involved in the transaction.

3. The identification and transactions record should be made available to SBP as and when required.
4. MFBs shall, however, retain records for longer period, if required by any other law or where transactions and / or relationship relate to any investigation, litigation or required by the Court of law or by any other competent authority.
5. State Bank of Pakistan, during the course of inspection, would particularly check the compliance of the above instructions.

Please acknowledge receipt.