August 25, 2007	Saturday	Sha’aban 11, 1428

KARACHI, Aug 24: Banks and Development Financial Institutions (DFIs) have been allowed to use ratings of international agencies for capital adequacy. The State Bank on Friday issued a circular announcing its decision that banks and DFIs can also use the ratings assigned by international rating agencies for assigning risk weights for capital adequacy purposes.

The SBP allows three rating agencies, namely Fitch Ratings, Moody’s, and Standard & Poors (S&P) for this purpose.

Banks and DFIs can use the entity ratings of above mentioned international rating agencies for risk weighting their foreign currency exposures either in Pakistan or outside Pakistan.

However, where ratings by the local rating agencies are not available for exposures in Pakistani rupee, ratings by these international rating agencies can be used.