![SBP issues revised Prudential Regulations for Consumer Financing](https://photo-cdn.urdupoint.com/media/2016/08/_2/740x404/pic_1470249867_1.jpg)
SBP Issues Revised Prudential Regulations For Consumer Financing
Fahad Shabbir (@FahadShabbir) Published August 03, 2016 | 11:44 PM
![SBP issues revised Prudential Regulations for Consumer Financing](https://photo-cdn.urdupoint.com/media/2016/08/_2/740x404/pic_1470249867_1.jpg)
KARACHI, (UrduPoint / Pakistan Point News - 3rd August, 2016) : The State Bank of Pakistan (SBP) has revised the Prudential Regulations for Consumer Financing with an aim to promote consumer financing in sustainable and fair manner while ensuring financial stability of the banks/DFIs.
A statement on Wednesday said that the revised regulations provide more discretion in decision making to banks/DFIs in line with their dynamic business environment. It may be mentioned here that SBP periodically reviews its regulatory framework in order to align it with changing business environment and international best practices, the statement added. It said that under these regulations, amongst others, banks/DFIs are advised to develop common glossary of Important Terms and all banks will use these important terms in their loan documentation.
The development of common nomenclature of Important Terms will not only complement the disclosure requirements of terms & conditions but will also facilitate the general public to better understand the terms of the loans and perform a meaningful comparison of the financing products offered by different banks.
Banks/DFIs have also been advised to initiate assessments for introduction of differentiated loan pricing in all consumer financing products, which inter-alia should be sensitive to loan product characteristics, borrowers' risk assessment, timely regular repayments and exemplary behavior. Banks/DFIs maintain general provision against performing consumer financing portfolio to protect them from the risks associated with the economic cyclical nature of this business.
The revised regulations introduce tiered base general provision requirement linked with gross non performing loan ratio (GNPLR) of the banks/DFIs. The regulation aims to incentivize banks/DFIs which have lower GNPLR and promote better risk management practices. Banks/DFIs have been allowed six months time to achieve compliance with new or revised regulations, the statement added.
Related Topics
Recent Stories
![Cricket: England v West Indies 3rd Test scoreboard](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019914.jpg)
Cricket: England v West Indies 3rd Test scoreboard
![Finance minister briefs Chinese officials on refor ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019922.jpg)
Finance minister briefs Chinese officials on reform agenda, engagement with IMF
![Finland says Russian vessel violated its territori ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019912.jpg)
Finland says Russian vessel violated its territorial waters
![Olympic opening ceremony under way on River Seine](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019266.jpg)
Olympic opening ceremony under way on River Seine
![West Indies' treble strike rocks England in third ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019264.jpg)
West Indies' treble strike rocks England in third Test
![Ukraine court orders detention of suspect in murde ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019262.jpg)
Ukraine court orders detention of suspect in murder of nationalist ex-MP
![Long queues, ticketing problems ahead of Paris ope ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019015.jpg)
Long queues, ticketing problems ahead of Paris opening ceremony
![Rana Sanaullah Khan joins Paris 2024 Olympics inau ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019638.jpg)
Rana Sanaullah Khan joins Paris 2024 Olympics inauguration reception
![Glowing tributes mark 69th birthday of President Z ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019637.jpg)
Glowing tributes mark 69th birthday of President Zardari at Governor's House
![Players unaware of spying scandal as Canada Olympi ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019635.jpg)
Players unaware of spying scandal as Canada Olympic coach sent home: official
![Naqvi hails Pak women cricketers for going down fi ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019013.jpg)
Naqvi hails Pak women cricketers for going down fighting against SL
!['Sabotage' on French rail network before Olympics: ..](https://photo-cdn.urdupoint.com/media/2024/07/_1/235x155/pic_1722019634.jpg)
'Sabotage' on French rail network before Olympics: What we know
More Stories From Pakistan
-
NDMA Advisory: More Monsoon Rains-wind, Thundershowers from July 28-31
7 hours ago -
Armed Forces, tri services chiefs pay homage to Captain Sarwar Shaheed
7 hours ago -
Agriculture dept inks agreement with Bakhabar Kissan
7 hours ago -
Rana Sanaullah Khan joins Paris 2024 Olympics inauguration reception
8 hours ago -
Glowing tributes mark 69th birthday of President Zardari at Governor's House
8 hours ago -
Balochistan CM announce depoliticizing of police, Levies force
8 hours ago
-
PTI creating unrest, halting economic progress in country: MNA
8 hours ago -
ISSI holds webinar on “Elections in Iran : Regional and International Insights”
8 hours ago -
ECP defers written test for seats of election officers
8 hours ago -
PN assists in firefighting, evacuation efforts for stranded civilians of Kashif Centre fire incident
8 hours ago -
Women's rights protection is govt's top priority. Hina Parvez Butt
8 hours ago -
"We stand in solidarity with Azma Bokhari”: Secretary Women’s Parliamentary Caucus
8 hours ago