The State Bank of Pakistan has allowed banks / Development Finance Institutions (DFIs) to assign clean credit card and personal loan limits up to a maximum of Rs. 5 million with a sub-limit of Rs. 2 million on clean personal loans to their “Prime Customers”.
According to the statement the higher clean limits facility has been provided to banks / DFIs with a view to providing flexible treatment to their prime customers. However, to aggregate exposure of banks/ DFIs in respect of prime customers has been capped at up to 20pc of total exposure on account of credit cards and personal loans, says circular letter issued to the Presidents/ Chief Executive Officers of all banks and DFIs here on Wednesday.
In view of this facility to prime customers, “Banks/DFIs may assign clean credit card and personal loan limits up to Rs 5,000,000 (aggregate from all banks/DFIs) to their prime customers subject to the condition that the aggregate clean limit assigned to one prime customer on account of personal loan should not exceed Rs. 2,000,000.
The banks/ DFIs shall put in place comprehensive criteria defining “Prime Customer” on the basis of, interalia, track record, credit worthiness and financial position, duly approved by their Board of Directors. The banks/ DFIs are also encouraged to set internal limits for such clean financing to prime customers keeping in view their risk appetite and other factors.
However, aggregate exposure on prime customers should not exceed 20pc of the total exposure of the respective portfolio i.e. 80pc exposure on account of credit cards and personal loans (separately) should comply with the limits prescribed for regular customers. Further, robust mechanism for risk profiling and risk mitigation should also be adopted for this purpose.”
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