The State Bank of Pakistan (SBP) has announced a major revision to its financing framework by increasing the aggregate exposure limit for unrated large private-sector borrowers from Rs3 billion to Rs10 billion. The revised limit, which will become effective on September 30, 2026, is expected to improve access to financing for large businesses and support private-sector growth.
The move represents an increase of more than 233% in the maximum amount that banks and Development Finance Institutions (DFIs) can collectively lend to a large private company that does not hold an external credit rating.
According to the central bank, the decision follows a review of the country’s evolving macroeconomic conditions and consultations with the banking industry. The revised exposure limit is intended to better align lending regulations with the financing needs of businesses operating in a changing economic environment.
The updated limit will also be incorporated into the Revised Instructions for Credit Risk (Standardised Approach) under Pakistan’s Basel III regulatory framework. These instructions are currently being implemented in parallel by banks and DFIs, while all other prudential requirements will remain unchanged.
For large private companies that are not externally rated, the higher borrowing threshold could provide greater financial flexibility. Businesses may now find it easier to secure funding for expansion projects, capacity enhancement, technology upgrades, and working capital requirements without being constrained by the previous lending cap.
The banking sector is also expected to benefit from the revised policy, as financial institutions will have greater room to support viable corporate clients. However, the increase in the exposure limit does not relax existing risk management standards. Banks and DFIs will still be required to conduct comprehensive credit evaluations and comply with all applicable prudential regulations before approving financing.
Industry experts believe the policy change could encourage higher levels of private-sector investment by improving access to credit for large enterprises. Increased financing availability may help businesses accelerate expansion plans, generate employment opportunities, and contribute to overall economic activity.
While the revised limit offers new opportunities for borrowers, responsible lending practices will remain essential. Since unrated companies do not have an independent external assessment of their creditworthiness, financial institutions must continue to rely on robust internal risk assessment processes to safeguard asset quality.
Overall, the SBP’s decision reflects an effort to strike a balance between expanding access to corporate financing and maintaining financial stability. By raising the aggregate exposure limit, the central bank aims to support business growth while ensuring that lending continues to be guided by sound risk management and regulatory oversight.