STATE BANK OF PAKISTAN
CENTRAL DIRECTORATE
I.I. Chundrigar Road, Post Box No. 4456,
KARACHI

BPRD Circular No. 15
June 06, 2000

All Banks/NBFIs.

Dear Sirs,

PRUDENTIAL REGULATION-XXVI CREDIT RATING OF THE FINANCIAL INSTITUTIONS

In terms of NBFI Circular No. 6 dated April 20, 1995, it was made mandatory for NBFIs to have themselves credit rated by a Credit Rating Agency on the approved panel of State Bank of Pakistan. With a view to safeguard the interest of the prospective investors, depositors and creditors, it has now been decided to make it mandatory for all Financial Institutions i.e. Banks/NBFIs to have themselves credit rated by a Credit Rating Agency on the approved panel of State Bank of Pakistan. Keeping in view the significance of credit rating it is advised that:

1. Credit rating will be mandatory for all Banks/NBFIs. These institutions will be required to get themselves credit rated by June 30, 2001.

2. The credit rating will be an ongoing process i.e., credit rating should be updated on a continuous basis from year to year and the rating report be submitted to the State Bank of Pakistan within a period of one month of the last notification of rating.

3. All Banks/NBFIs listed on the Stock Exchange(s) will make a disclosure of their credit rating to the public within one month of the last notification of rating.

4. All other Banks/NBFIs not listed on the Stock Exchange(s) will get themselves credit rated, however, it shall be mandatory upon them to make their credit rating public within a period of two years from the date of their first rating and thereafter annually within one month of the last notification of rating.

5. Non compliance to these instructions shall render the Financial Institutions and Official(s) concerned liable to penal action under the relevant provisions of the Banking Companies Ordinance, 1962.

Please acknowledge receipt.

Yours faithfully,

Sd/-
(KAZI ABDUL MUKTADIR)
DIRECTOR