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.
Circulars/Notifications - Banking Policy & Regulations Department
BPRD Circular Letter No. 02 of 2025
January 24, 2025
The Presidents / Chief Executives All Banks/DFIs
Dear Sir/Madam,
Basel III Capital Framework: Treatment of FX Translation Reserves
Please refer to “Instructions for BASEL-III Implementation in Pakistan” issued vide BPRD Circular No. 6 of 2013.
It has been decided to treat Foreign Exchange Translation Reserves as part of Common Equity Tier-1 (CET-1) Capital with effect from December 31, 2024.
All other instructions on the subject shall remain unchanged.
Please acknowledge receipt.
Yours truly ,
Sd/-
(Shahid Rabbani)
Additional Director