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CONTRIBUTIONS AND DONATIONS FOR CHARITABLE, SOCIAL, EDUCATION AND PUBLIC WELFARE PURPOSES -
PRUDENTIAL REGULATION -XX

1. In terms of Section 41 of the Banking Companies Ordinance, 1962, all banks and Development Finance Institutions are directed to strictly observe the following rules in the matter of making any donations/contributions for charitable, social, education or public welfare purposes.

i) Only those banks which meet provisioning and capital adequacy requirements prescribed by the State Bank and pay positive rates of return to their depositors can make donations.

ii) Every donation or contribution to be made must carry the prior approval of the Board of Directors.

2. All donations or contributions to be made during the year must be specifically approved by the shareholders in their Annual General Meeting.

3. Banks/DFIs are further directed to expressly disclose in their Annual Accounts the total donation/contribution made during the year alongwith names of donees, the whom total donations/contribution during the year were made in excess of Rs. 100,000/-. In the case of donations where any director or his spouse has interest in the donee, the names of such directors, their interest in the donee, the names of such directors, their interest in the donee and the names and addresses of all donees, shall also be given.

4. The auditors of the banks shall also report whether the bank has complied with all the above requirements in their report to the State Bank in accordance with the guidelines given in BID Circular No. 5 dated the 19th December, 1972 and subsequent amendments thereto.

5. Each bank/DFI shall furnish the State Bank with a statement for each financial year indicating the names of persons and the amount of donation/contribution made to each donee during the year within 30 days of the close of the financial year. This statement must be accompanied with a certificate signed by the chief executive that the bank has met with all the requirements set out by State Bank for making donations/contributions.

Please acknowledge receipt.

Yours faithfully,
(JAMEEL AHMAD)
Additional Director

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