SBP increases retail portfolio limit to Rs300mn, enhances SME financing exposure cap

The State Bank of Pakistan (SBP) has increased the regulatory retail portfolio limit from Rs180 million to Rs300 million.

“It has been decided to enhance the regulatory retail portfolio limit of PKR 180 million, specified under the Basel Framework, to PKR 300 million with immediate effect,” read the central bank notice.

All other instructions on the subject shall remain unchanged, it added.

Moreover, the SBP in its bid to further facilitate promotion of Small-Medium Enterprise (SME) financing also amended Prudential Regulations per party exposure limits for Small enterprises (SE) and Medium Enterprises (ME).

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As per SBP latest amendments, Small Enterprise can avail exposure of up to Rs100 million from a single bank/ DFI or from all banks and DFIs.

“Banks and DFIs are allowed to deduct the liquid assets (encashment value of bank deposits, certificates of deposit/ investment, Pakistan Investment Bonds, treasury bills and national saving scheme securities) held under their perfected lien for calculation of per party exposure limit,” read the SBP notice.

Similarly, Medium Enterprise can now avail financing (including leased assets) of up to Rs500 million from a single bank/ DFI or from all banks and DFIs.

“Banks & DFIs are allowed to deduct the liquid assets (encashment value of bank deposits, certificates of deposit/ investment, Pakistan Investment Bonds, treasury bills and national saving scheme securities) held under their perfected lien for the purpose of calculation of per party exposure limit,” it said.

The SBP said that the changes are applicable with immediate effect.