Regulatory Alerts2025-07-30 | BPRD Circular No. 02Regulatory Framework on Recovery Planning
This regulatory framework mandates that all banks develop and maintain board-approved, comprehensive recovery plans designed to stabilize operations and avoid failure during severe financial stress. Institutions must define clear recovery triggers, establish a menu of feasible recovery options, and conduct regular scenario testing to ensure operational readiness and effective decision-making. The State Bank of Pakistan (SBP) will formally review these plans for credibility and feasibility, with the power to enforce revisions or impose supervisory actions if banks fail to address identified gaps or maintain adequate recovery capacity.
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