SBP revises prudential regulations for MFBs
March 6, 2007 |14:45 | Banks By : Team X
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KARACHI: State Bank of Pakistan Monday said certain changes have been made in existing legal and regulatory framework regarding Prudential Regulations for Micro Finance Banks (MFBs).
Microfinance Banking in Pakistan witnessed considerable growth in recent years. However, keeping in view existing large unmet demand in Microfinance sector and need for strengthening institutional capacities of MFBs, certain changes in existing legal & Regulatory framework have been made.
Some amendments were made in MFIs Ordinance2001 through Finance Bill 2006.
The current changes in Prudential Regulations for MFBs mainly relate to increase in maximum loan size, investment of surplus fund, minimum income threshold, submission of audited financial statements, declaration of Fidelity and Secrecy.
According to these rules, loan acquisition has been made easier, as the maximum loan rate limit has been made to Rs150000.
According to the revised Prudential Regulations, the MFBs will be allowed to issue a loan of Rs150000 to a single person.
The central bank issued a simple form to the one availing loan, on the basis of which all the banks will prepare their application form.
The revised Prudential Regulations for MFBs come into force with immediate effect. Three of existing SBP Circulars viz. BSD Circular18 dated October 14, 2002, BSD Circular 2 dated 28-03-2005, & SMED Circular 7 dated 13-04-2006, will be superseded by revised Prudential Regulations for MFBs.
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