STATE BANK OF PAKISTAN - BANKING POLICY DEPARTMENT

BPD Circular Letter No. 29
August 13, 2004  

The Chief Executives,
All Banks/DFIs
Dear Sirs/Madam,

Extension in Repayment Period of Consumer Loans Intended for Educational Purposes

Please refer to the Prudential Regulations issued vide BPD Circular No.35 dated 28th October, 2003.

2. It is clarified that the maximum tenure of personal loans (5 years) as stipulated in R-26 of the Prudential Regulations for Consumer Financing may be extended to 7 years for loans/advances given for educational purposes only, provided that disbursement of such loans shall directly be made by the bank/DFI to the educational institution, and the borrower shall not be allowed to utilize/withdraw cash directly from the bank/DFI under this head for any other purpose."

3. All other instructions on the subject shall, however, remain unchanged.

4. Please acknowledge receipt.