March 9, 2002	Saturday	Zilhaj 24, 1422

KARACHI, March 8: The State Bank has allowed banks and non-bank financial institutions to use their prerogative in accommodating borrowers.

A SBP circular issued to all banks and NBFIs has clarified that it is not binding on them to turn down requests for financial assistance “solely on the basis of overdue (loans) reported in the CIB (Credit Information Bureau) report.” The circular says that the regulation made in this regard clearly stipulates that while due weightage may be given to CIB report “the bank/NBFI can consider extending financial accommodations as it may deem fit if the required facility or transaction is viable as an acceptable credit risk.”

The circular said it had come to the notice of the SBP that “banks/NBFIs reject loan requests and even in some cases do not process the loan application if CIB report of one of the group companies shows overdue (loan) on the plea that the SBP’s Prudential Regulations/Rules of Business do not allow them to accommodate such customers.” Hence this clarification.