Regulatory Alerts2025-01-24 | BPRD Circular Letter No. 02Basel III Capital Framework: Treatment of FX Translation Reserves
The Banking Policy & Regulations Department (BPRD) has mandated that Foreign Exchange Translation Reserves be classified as part of Common Equity Tier-1 (CET-1) capital. This regulatory amendment, effective December 31, 2024, updates the Basel III implementation guidelines for all Pakistani banks and development finance institutions. All other existing capital framework instructions remain unchanged, ensuring a seamless transition for regulated entities.
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