SBP Raises Borrowing Limit to Rs10 Billion

The State Bank of Pakistan (SBP) has significantly increased the aggregate financing exposure limit for unrated large private sector borrowers, raising the cap by more than 233% from Rs3 billion to Rs10 billion for all banks and Development Finance Institutions (DFIs).

Under the existing framework, banks and DFIs were collectively allowed to extend financing of up to Rs3 billion to an unrated large private sector borrower. The revised limit will increase this ceiling to Rs10 billion, with the new arrangement taking effect from September 30, 2026.

In a circular, the SBP stated that the decision was made after reviewing developments in the macroeconomic environment and considering feedback received from the banking industry.

The central bank also announced that the revised limit will be incorporated into the Revised Instructions for Credit Risk (Standardised Approach) under the Basel-III framework, originally issued through BPRD Circular No. 3 dated September 24, 2025, which banks and DFIs are currently implementing under a parallel run.

The SBP clarified that all other prudential instructions and regulatory requirements governing the framework will remain unchanged.

The enhanced financing limit is expected to provide greater access to funding for large private sector companies that do not possess external credit ratings, allowing them to secure larger financing facilities for business expansion and operational growth.

Banking analysts believe the move will encourage private sector investment, support corporate expansion and contribute to broader economic growth by easing financing constraints for eligible businesses.

Despite the higher exposure limit, banks and DFIs will continue to be bound by all applicable prudential regulations, internal risk management policies and credit assessment standards before approving or disbursing financing.