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020307
STATE BANK OF PAKISTAN BANKING SUPERVISION DEPARTMENT KARACHI
BSD Circular Letter
No. 6
March 7, 2002
All Banks/NBFIs
Dear Sirs,
CIB CLEARANCE
It has come to
notice of State Bank of Pakistan that banks/NBFIs reject loan requests and even in some
cases do not process the loan applications of customers if CIB report of one of the group
companies shows overdue on the plea that SBP’s Prudential Regulations/Rules of
Business does not allow them to accommodate such customers.
2. In this regard it is clarified that role of CIB is to provide a consolidated
picture of a borrower as of a given date based on the information/data supplied by the
banks/NBFIs. The Prudential Regulation No. 18 & NBFI Rule of Business No. 23 does not
bind a financial institution to turn down the application for financial assistance solely
on the basis of over due reported in the CIB report. The regulation clearly stipulates
that while due weightage may be given to CIB report the bank/NBFI can consider extending
financial accommodation as it may deem fit if the requested credit facility or transaction
is viable as an acceptable credit risk.
3. Banks/NBFIs are, therefore, advised to take due care in processing of application for
financial accommodation in a broader perspective.
Please acknowledge receipt.
Yours faithfully,
(Jameel Ahmad)
Senior Joint Director
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