The central bank updates Prudential Regulation R-6, setting investment caps for individual companies, startups, mutual funds, REITs and private equity funds.
KARACHI, October 23, 2026: The State Bank of Pakistan (SBP) has revised Regulation R-6 of the Prudential Regulations for Corporate/Commercial Banking, updating equity investment limits for banks and development finance institutions (DFIs).
In a circular addressed to the presidents and chief executives of all banks and DFIs, the central bank amended provisions governing the acquisition of shares and mutual fund units.
Under the revised rules, a bank’s or DFI’s aggregate investment in the shares of a single company must not exceed the lower of 5% of its Tier-I capital, as reported in its latest reviewed half-yearly or audited annual financial statements, or 10% of the investee company’s paid-up shares.
For investments in individual startups, including financial technology (fintech) startups, the limit will be the lower of 5% of the investing institution’s Tier-I capital or Rs500 million.
For investments in mutual funds, real estate investment trusts (REITs) and private equity funds, the permitted exposure will be the lower of 5% of the bank’s or DFI’s Tier-I capital or 20% of the units of the respective fund.
The SBP has also directed banks and DFIs to maintain an approved policy incorporating an internal evaluation process for assessing equity investment decisions objectively.
The assessment must consider the institution’s financial position, aggregate investment portfolio, risk appetite, expected returns, expertise, business strategy and exit strategy.
Furthermore, investments arising from strategic holdings and investments in units of all types of mutual funds and private equity funds will count towards the applicable aggregate investment limits.
However, National Investment Trust (NIT) units will remain excluded until their privatisation.
The SBP stated that all other existing instructions on the subject would remain unchanged. The amendments form part of its prudential framework governing banks’ and DFIs’ investment activities.