DPD Criteria for Banks and Development Finance Institutions

BPRD Circular Letter No. 20 — September 12, 2025

Presidents/ Chief Executives,

All MFBs

Dear Sirs/Madams,

IMPLEMENTATION OF INTERNATIONAL FINANCIAL REPORTING STANDARD 9 (IFRS 9)

1. Please refer to BPRD Circular No. 03 dated July 05, 2022 and ACFID Circular No. 01 dated May 16, 2025.
2. Considering the revisions in classification and provisioning requirements for MFBs, it has been decided to update the Days Past Due (DPD) mapping as given in Annexure-C of SBP's IFRS 9 Application Instructions, issued vide the above mentioned BPRD Circular. The same is enclosed herewith.
3. Other instructions on the matter issued from time to time shall remain unchanged

Enclosed:

• Annexure- C of SBP’s IFRS 9 Application Instructions

Yours sincerely,

Ghulam Muhammad
Director

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Annexure- C of SBP’s IFRS 9 Application Instructions

Annexure-C Particular Classification Days Due* Stage Allocation under IFRS 9 Provisions to be made Performing 1-59 Stage 1 Underperforming 60-89 Stage 2 Non-performing - - - Subtandard 90 or more Doubtful 180 or more 1 year or more 181 or more Performing 1-59 Stage 1 Underperforming 60-89 stage 2 Non-Performing 90 or more Loss 180 or more Performing 1-59 Stage 1 Underperforming 60-89 stage 2 Non-performing - - - Subtandard 90 or more Doubtful 180 or more Loss 1 year or more Performing 1-59 Stage 1 Underperforming 60-89 stage 2 Non-performing - - - Substandard 90 or more Loss 180 or more Performing 1-59 Stage 1 Underperforming 60-89 OAEM 90-179 Non-performing - - - Substandard 180 or more Doubtful 1 year or more Loss 2 years or more Performing 1-59 Stage 1 Underperforming 60-89 Stage 2 Non-performing - - - OAEM 90 or more Substandard 180 or more Doubtful 1 year or more 18 Months or more 181 or more Performing 1-59 Stage 1 Underperforming 60-89 Stage 2 Non-performing FA - - - Substandard 90 or more Doubtful 180 or more 1 year or more 181 or more Loss Trade Bills PRUDENTIAL REGULATIONS FOR SMALL & MEDIUM ENTERPRISES FINANCING Small Enterprise Financing Medium Enterprise Financing As per IFRS 9 ECL Modelling Stage 3 Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirement As per IFRS 9 ECL Modelling Loss Trade Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirement Stage 3 Loss Trade Bills Stage 3 PRUDENTIAL REGULATIONS FOR CORPORATE /COMMERCIAL BANKING Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements HOUSING FINANCE PRUDENTIAL REGULATIONS Stage 3 Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements Stage 2 As per IFRS 9 ECL Modelling DPD Criteria for Banks and Development Finance Institutions (DFIs) PRUDENTIAL REGULATIONS FOR CONSUMER FINANCING Personal Loans - R 21 Stage 3 Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements As per IFRS 9 ECL Modelling As per IFRS 9 ECL Modelling As per IFRS 9 ECL Modelling Credit Card Advances - R 8 Auto Loans - R 14 Stage 3 Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements Stage 3 Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements As per IFRS 9 ECL Modelling

Annexure-C Particular Classification Days Due* Stage Allocation under IFRS 9 Provisions to be made Performing DPD Criteria for Banks and Development Finance Institutions (DFIs) 1-59 Stage 1 Underperforming 60-89 OAEM 90-364 Non-performing - - - Substandard 1 year or more Production/ Working capital 18 Months or more Development/ Term Finance 2 years or more Production/ Working capital 2 years or more Development/ Term Finance 3 years or more Performing 1-59 Stage 1 Underperforming 60-89 OAEM 90-179 Non-performing - - - Substandard 180 or more Doubtful 365 to 2 years Loss More than 2 years Performing 1-59 Stage 1 Underperforming 60-89 Stage 2 Non-performing - - - Substandard 90-more Loss 180 or more Performing 1-59 Stage 1 Underperforming 60-179 Stage 2 Non-performing - - - Substandard 180 or more Doubtful 1 year or more Loss 2 years or more Performing 1-59 Stage 1 Underperforming 60-179 Stage 2 Non-performing - - - Substandard 180 or more Doubtful 1 year or more 18 Months or more 181 or more Performing 1-59 Stage 1 Underperforming 60-179 Stage 2 Non-performing - - - Doubtful 180 or more Loss 1 year or more Housing Loans As per IFRS 9 ECL Modelling Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements Agriculture and Livestock Loans As per IFRS 9 ECL Modelling Stage 3 Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements As per IFRS 9 ECL Modelling Stage 3 Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirement Loss Trade Bills Stage 3 Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements DPD Criteria for Microfinance Banks (MFBs) Loss Doubtful This annexure needs to be read in line with the instructions given in para 3.4, 3.5 and 3.13 of SBP's IFRS 9 Application Instructions As per IFRS 9 ECL Modelling Stage 2 Stage 2 PRUDENTIAL REGULATIONS FOR AGRICULTURE FINANCING Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements * Stage 3 Stage 3 Whichever is higher (a) IFRS 9 ECL OR (b) PR's Requirements PRUDENTIAL REGULATIONS FOR INFRASTRUCTURE PROJECT FINANCING As per IFRS 9 ECL Modelling Microenterprise Loans Stage 3 Microfinance Loans (General) As per IFRS 9 ECL Modelling

• Where mark-up/interest or principal is overdue by the specified days or more from the due date. Where Trade Bills (Import/Export or Inland Bills) are not paid/adjusted within specified days of the due date. The classification will be applicable on all financial assets that come under the scope of impairment under IFRS 9 *The DPD criteria can be relaxed accordingly against the relaxations provided to FI's agri loans Disclaimer: The stage allocations against days past due (DPD) indicator is to be considered only as a backstop for the rebuttable presumption allowed under IFRS 9 for DPD. The FIs are advised to devise their own DPD criteria for portfolios having shared credit characteristics (as described under IFRS 9) rather than facility wise. PRUDENTIAL REGULATIONS FOR MICROFINANCE BANKS