MTM losses on AFS securities

PBA’s Accounting and Taxation Sub Committee has reviewed the matter and has determined that imminent capital constraints need to be considered vis a vis the recognition of MTM losses on AFS securities.

In view of the imminent capital constraints and on the recommendation of PBA’s Accounting and Taxation Sub Committee, PBA has requested SBP to consider allowing the banks to recognise, in a shared manner, the current deficit on revaluation of Federal Government Securities (local and foreign currency) for the purpose of calculation of capital adequacy.

CEO/SG PBA has also written to Dr. Inayat Hussain, Deputy Governor,, SBP, pointing out that the above mentioned factors will offer some relief, which will provide some space for the banks to continue their lending activity to government, private and public sectors while remaining sufficiently above the regulatory limits of capital ratios.