The State Bank of Pakistan (SBP) has withdrawn the General Provision Requirements (GPRs) for the loans extended by microfinance banks (MFBs) against gold or other cash collateral.
According to a press statement issued here on Friday, the central bank said that the fresh amendment in the SBP’s Prudential Regulation for MFBs pertaining to GPRs is envisaged to ease some pressure on the microfinance banks with regard to maintaining minimum capital requirement and capital adequacy ratio. It says that in case of all other loans, the SBP has reduced the GPRs for MFBs by 50 basis points.
“It has been decided to withdraw the general provision requirements wherein loans have been secured against gold or other cash collateral with appropriate margin,” says AC&MFD Circular Letter No: 01 issued by the regulator to all microfinance banks.
