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031117

The Credit Rating of financial institutions provides the depositors, investors and creditors an independent assessment as to the institutions’ capacity to meet their short term and long term obligations as well their future out look and enables them to make informed decisions about investment and deposit etc in the institutions. Considering its critical importance for overall health of the financial system, as also to safeguard the interest of prospective investors, depositors and creditors the rating has already been made mandatory for all commercial banks and DFIs operating in the country. As Microfinance Banks are also emerging as important players in the country’s banking and financial system, it has been decided to make it mandatory for Microfinance Banks to get themselves rated. A new Prudential Regulation, the PR 29, for Microfinance Banks regarding credit rating of MFBs is therefore being issued:
“ PR –29: CREDIT RATING:

1. The MFBs shall get themselves rated by any of the rating agencies on the panel of State Bank of Pakistan or any international microfinance rating agency with prior approval of SBP, within three years of grant of license by State Bank of Pakistan to operate as MFB or within one year of commencement of deposit mobilization services which ever is earlier.

2. The rating shall be an ongoing process and updated on a continuous basis from year to year within four months of the close of financial year after the first rating as stated in the first paragraph. The rating report shall be submitted to State Bank of Pakistan within 7 days of notification of the latest rating. The rating shall also be disclosed to the public within 15 days of the notification of the latest rating by the rating agency.”
Please acknowledge receipt.


Yours faithfully,
(JAMEEL AHMAD)
Director