KARACHI, May 21: The State Bank has introduced some amendments to the definitions of the word “Group” and added a new paragraph to the explanation of “Liquid Assets” in Prudential Regulations for Corporate and Commercial Banking.
The central bank said in a circular issued on Friday that the new definition of the word Group means persons, whether natural or juridical, if one of them or his dependent family members or its subsidiary have control or hold substantial ownership interest over the other.
The circular says that with respect to Liquid Assets, the circular has added the following paragraph: “The inter-branch indemnity/guarantee issued by the bank’s overseas branch in favour of its sister branch in Pakistan, would also be treated at par with Liquid Assets, provided the bank is rated A and above or equivalent either by Standard & Poors, Moody’s or Fitch-Ibca. The indemnity for this purpose should be similar to a guarantee i.e. unconditional and demand in nature.
The circular has also changed the definition of the word Group in the Prudential Regulations for SMEs financing. The new definition of the world Group would also apply on Prudential Regulations for SMEs financing. Similarly the new paragraph added to the explanation of Liquid Assets would also apply on the same, says the circular.
