BoD and general meetings: SBP asks FIs to ensure accurate recording of minutes

The State Bank of Pakistan (SBP) has asked financial institutions to ensure accurate recording of minutes of Board of Directors (BoD) and general meetings reflecting the key deliberations, rationale for each decision made, and any significant concerns or dissenting views.

The SBP has always stressed upon proper and detailed recording of minutes of the Board of Directors and general meetings so as to reflect a comprehensive picture of the deliberations held and decisions taken during these meetings.

However, it has been observed that the instructions are not being followed in letter and spirit by some of the banks/MFBs/DFIs. Therefore, in order to address the issue, the SBP has decided to further elaborate and consolidate all instructions issued previously.

Accordingly, all banks/MFBs/DFIs have been advised must ensure accurate recording of minutes of BoD and general meetings and minutes of the Board meetings should include details of matters decided/resolved through circulation.

Financial institutions will also ensure that the deliberations made by the participating Board member(s) are duly reflected in the minutes of the meeting(s) using name tags and note of dissent on any matter by Board member(s), rejection or deferral of any proposal of the management must be fully elaborated and recorded accordingly in the minutes.

As per fresh directives, all banks/MFBs/DFIs will ensure that recording of Minutes of the Board Committees' meetings must also be given as much care and attention as those of the full Board meetings and in the event of conflict of interest, the Board should detail in minutes as to how they have complied with the organization's conflict of interest policy.

The Company Secretary will be required to submit duly certified copies of the draft minutes of the Board of Directors and General meetings within twenty-one days of the date of such meetings through Data Acquisition Portal (DAP) of State Bank of Pakistan.

In case there is any change in the approved/final minutes, from the draft minutes submitted earlier, the Company Secretary will also submit certified copies of such approved/final minutes within ten days of the approval through DAP. Further, any change from the draft minutes must be underlined and mentioned in bold.

The Company Secretary will also ensure to scan the certified copies of minutes in PDF format using OCR (Optical Character Recognition) option, upload it on DAP after necessary encryption/ password protection and communicate the password to the relevant unit head at Offsite Supervision & Enforcement Department, SBP via email.

The instructions covered in the previous circulars/circular letters relevant to minutes of board of directors/general meetings stand superseded with the current instructions.

According to SBP, these instructions will be applicable with immediate effect and the banks/MFBs/DFIs are advised to ensure strict compliance of the instructions in letter and spirit.