KARACHI, June 16: The State Bank has told banks and DFIs or development finance institutions under Prudential Regulations for consumer financing they can now finance light commercial vehicles also used for personal purposes.

The central bank sent this advice to banks and DFIs through a circular issued by its Banking Policy Department on Wednesday. The circular tells banks and DFIs that credit card limits sanctioned in excess of Rs500,000 before October 28, 2003 may be continued.

It says that the auto loans provided for purchasing vehicles older than five years prior to October 28, 2003 may also be continued under the old terms and conditions till their maturity.

The State Bank had issued a set of prudential regulations for consumer financing on October 28, 2003 that had set limits for credit card and auto loans etc. The circular clarifies that the unsecured limits of Rs500,000 prescribed both for credit cards and personal loans are independent of each other and may be obtained by single borrower at the same time.

It also amends one of the prudential regulations. The amended regulation says that maximum unsecured limit under credit card to a borrower shall not exceed Rs500,000. It says that supplementary cards shall be considered part of the principal borrower.

"The banks/DFIs may allow financing under the credit card scheme in excess of the limit of Rs500,000 upto Rs2 million provided the excess amount is secured appropriately.

All credit card limits in excess of Rs2 million should be secured against liquid assets." "For charged cards pre-set spending limits generated by the standardized systems shall be allowed."