The Presidents / Chief Executives,
All Banks/DFIs

Dear Sirs/Madam,

ESTABLISHMENT OF SUBSIDIARIES BY BANKS/DFIs

Please refer to BPD circular No. 7 of 2004 on the captioned subject.

2. Clause (iii) of the above mentioned circular will be replaced with the following;

“The Board of Directors of the subsidiary should be completely independent and different from the Board of Directors of the Bank/DFI. The Bank/DFI may nominate its employees on the Board of Directors of the subsidiary up to 50% of the total directors, and the remaining directors nominated by the Bank/DFI should be independent individuals.”

3. Other instructions on the subject will, however, remain unchanged.

4. Please acknowledge receipt.