KARACHI

The Pak Banker - - FRONT PAGE -

In or­der to en­cour­age fi­nanc­ing ac­tiv­i­ties in the econ­omy, it has been de­cided to in­clude Guar­an­tCo Limited in Pru­den­tial Reg­u­la­tions for Cor­po­rate/Com­mer­cial Bank­ing.

The SBP says 85% of the un­con­di­tional fi­nan­cial guar­an­tees ac­cepted as col­lat­eral and payable on de­mand by banks/DFIs, (rated at least 'A' or equiv­a­lent by a rec­og­nized rat­ing agency) shall be de­ducted. Same weigh­tage to the guar­an­tees of sim­i­lar na­ture is­sued by the In­ter­na­tional Fi­nance Cor­po­ra­tion (IFC), Com­mon­wealth Devel­op­ment Cor­po­ra­tion (CDC) Deutsche In­vesti­tions und En­twick­lungs­ge­sellschaft mbH (DEG), Ned­er­landse Fi­nancier­ings-Maatschap­pij voor On­twikke­l­ings­lan­den N.V (FMO), Guar­an­tCo Limited and Asian Devel­op­ment Bank (ADB) shall also ap­ply.

How­ever, in re­spect of above-men­tioned banks/DFIs or en­ti­ties whose guar­an­tee has been ac­cepted as col­lat­eral, the ben­e­fi­ciary bank/DFI shall im­me­di­ately re­port to SBP

Any in­stance where the guar­an­tee is­su­ing bank/DFI or en­tity fails to hon­our the claim within 20 work­ing days of the date on which the guar­an­tee is in­voked, Guar­an­tCo Ltd. pro­vides risk mit­i­ga­tion in­stru­ments to credit en­hance lo­cal cur­rency debt is­suance by pri­vate, mu­nic­i­pal, and paras­tatal in­fra­struc­ture sec­tors in lower in­come coun­tries through­out the world. It also of­fers funds for tech­ni­cal as­sis­tance to de­velop and struc­ture trans­ac­tions that in­clude a con­tin­gent prod­uct pro­vided by Guar­an­tCo, as well as to sup­port lo­cal ca­pac­ity build­ing and cap­i­tal mar­ket de­vel­op­ment. The com­pany is based in Mau­ri­tius. Guar­an­tCo Ltd op­er­ates as a sub­sidiary of Pri­vate In­fras­truc­ture Devel­op­ment Group.

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