State Bank of Pakistan amends regulations for Microfinance Banks

Microfinance Focus, May 14, 2010: State Bank of Pakistan (SBP) has yesterday issued amendments in the Prudential Regulations for microfinance banks (MFBs) for the maintenance of Cash Reserve & Liquidity and Submission of periodical returns. The amendments require MFBs to maintain CRR equivalent to not less than 5% of its deposits including demand deposits, and time deposits with tenor of less than 1 year. Time deposits with tenor of 1 year and above will not require any cash reserve. The MFB shall also maintain Statutory Liquidity Requirement (SLR) equivalent to at least 10% of its total Demand liabilities, and time liabilities with tenor of 1 year and above will not require any SLR. For SLR calculation, Treasury Bills and Pakistan Investment Bonds are approved securities.

Issued by Head of Microfinance department, Dr. Saeed Ahmed in a press release, the amendments  have made it mandatory for MFBs to submit their CRR and SLR statements along with bi-weekly (fortnightly) statement of affairs  to Off-Site Supervision & Enforcement Department, State Bank. The amendments will be effective from 28th May, 2010. These amendments have been made to streamline calculations and reporting of Cash Reserve Requirement (CRR) and Statutory Liquidity Requirement (SLR) of MFBs.

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