Government of Pakistan

State of Bank Pakistan

May 22, 2004

BSD Circular No .05 of 2004

The Chief Executives

All DFIs,

Dear Sirs,

MINIMUM CAPITAL REQUIREMENTS

Please refer to BSD Circular No. 5 dated March 25, 2003 on the above subject, in terms of which the banks operating in Pakistan are required to meet minimum paid-up capital requirement of Rs 1 billion free of losses and to maintain a capital adequacy ratio (CAR) not less than 8% of their risk weighted assets

In terms of the powers vested upon the State Bank under Section 13 of the Banking Companies Ordinance, 1962 it has been decided that effective from 1st July 2004, all Development Financial Institutions (DFIs) shall also be required to meet minimum paid-up capital requirement of Rs 1 billion free of losses and maintain capital adequacy ratio not less than 8% of their risk weighted assets as envisaged in the above mentioned circular. Furthermore, they are required to report their capital position on quarterly basis alongwith Quarterly Statement of Condition on the prescribed format, w.e.f Quarter ending 30th September, 2004. A copy of the BSD Circular No. 5 dated March 25, 2003 is attached. All DFIs are advised to meet the Minimum Capital Requirement in accordance with the guidelines laid down in the said Circular

Please acknowledge receipt.

Encl: As Above

Yours faithfully,

(JAMEEL AHMAD)

Director