Primary reference: BPRD Circular Letter No. 22 of 2026, 23 October 2026 · Detailed research review: 25 October 2026. Consult the original instrument and any later amendments; draft measures are not operative until approved and commenced.
BPRD Circular Letter 22/2026 amends paragraphs 1(A) and 1(B)(iv) of Regulation R-6: single-company holdings are capped at the lower of 5% of Tier-I capital or 10% of investee paid-up shares, with separate Rs500 million startup and 20% fund-unit limits.
Exact amended investment ceilings in Regulation R-6
For investment in the shares of one company, the bank or DFI may not exceed the lower of 5% of its Tier-I capital (taken from the preceding half-yearly reviewed or annual audited statements) and 10% of that investee company’s paid-up shares. The test includes both the bank/DFI's capital-based exposure and its percentage ownership of the investee.
For a single startup, including a fintech startup, the limit is the lower of 5% of Tier-I capital and Rs500 million. The institution therefore cannot use the capital-based threshold alone when the Rs500 million ceiling is smaller.
For units in any one mutual fund, REIT or private equity fund, the limit is the lower of 5% of Tier-I capital and 20% of the units in the relevant fund. These are concentration limits, not a statement that all investments meeting them are automatically permitted.
Approved investment policy and aggregate limits
The revised paragraph 1(A)(iii) requires banks/DFIs to maintain an approved equity investment policy including an objective internal evaluation process. The evaluation must consider financial standing, aggregate portfolio, risk appetite, expected return, investment expertise, business strategy and exit arrangements.
Revised paragraph 1(B)(iv) confirms that exposures arising from strategic investments and units of all forms of mutual funds and private equity funds count towards specified aggregate investment limits. NIT units are excluded until privatisation.
How the revision should be applied
Investment committees should calculate both legs of the relevant ‘lower of’ test before each new or increased investment; reliance on 5% of Tier-I capital without checking the shareholding, rupee or unit ceiling would be incomplete.
The amended paragraphs are the operative focus of BPRD Circular Letter No. 22 of 2026. SBP expressly states that all other instructions remain unchanged; this brief does not suggest those restrictions have been withdrawn.
What do the exact changes mean for affected organisations?
Banks and DFIs should recalculate proposed and current concentration exposures under the exact revised Regulation R-6 thresholds and verify that the approved policy covers all required assessment factors.
Specific compliance and response checklist
- Test investments in a single company against 5% of Tier-I capital and 10% of paid-up shares.
- Apply the Rs500 million startup cap, where lower than 5% of Tier-I capital.
- Apply the 20%-of-fund-units cap to each relevant mutual fund, REIT or private equity fund.
- Reassess approved investment policies and aggregate exposure treatment, including the NIT exclusion.
Timing and legal status
Circular issued 23 October 2026. Amends specified paragraphs of Regulation R-6; no delayed commencement is stated in the circular.
This is a summary of the revised paragraphs only. All other prudential requirements and exposure definitions remain applicable.
SBP — BPRD Circular Letter No. 22 of 2026 (full amended Regulation R-6 paragraphs)