KARACHI, May 29: The State Bank has revised the criteria for grouping of borrowers for the purpose of reporting in the Credit Information Bureau (CIB).

"The criteria have been revised in order to bring uniformity as also to spare the borrowers from the inconvenience being faced by them on account of old definition of the group," says a press release issued by the SBP on Saturday.

The revised criteria will group together only those companies/ firms which have direct affiliation/significant influence over the affairs of related companies/firms. Under the revised criteria, banks/development finance institutions (DFIs) and non- bank finance companies (NBFCs) will now report the names of the group companies to the SBP according to its definition in Prudential Regulations.

The State Bank has also advised the banks/DFIs/NBFCs to be very careful while reporting the names of group entities in the CIB data as onus for correct information of the group as per the same definition.

The existing criteria which were framed in 1994 at times resulted in grouping of some companies/firms/individuals with defaulters due to common directorship or ownership, notwithstanding the fact that directors with 100 shares or owners with five per cent shares are not always in a position to control the affairs of the institution.

A circular issued by the SBP on this subject said that banks/ DFIs/NBFCs will ensure while determining the group relationships they should not consider foreign national directors and directors of companies under liquidation. They should also not consider (i) foreign controlled entities (ii) banks/DFIs (iii) public sector enterprises (iv) federal/provincial government (v) private sector enterprises' nominee directors on the board of the public sector enterprises.