NBFCs dealing in guarantees: SECP amends criteria of qualified capital

Business Recorder reported that the Securities and Exchange Commission of Pakistan has changed the qualified capital rules for non-banking finance companies that deal only in issuing guarantees. The regulator introduced Ring-Fenced Capital as a new component of the recognised capital base. The change was made through Circular No. 22 of 2026, issued on Tuesday.

Under the revised definition, qualified capital now combines callable capital, contingent capital and ring-fenced capital, along with any drawdowns under those categories. Previously it covered only callable and contingent capital under the framework set by Circular No. 17 of 2019. The amendment also sets out conditions on how ring-fenced funds are recognised, used and invested.

Ring-fenced capital refers to a non-returnable grant, funding or committed sum given to an NBFC by the federal or a provincial government, or by a body owned or controlled by either. Such funding is meant to let a company extend guarantees to widen its portfolio outreach or to cover agreed priority sectors. The regulator has set rules so these funds stay dedicated to their purposes rather than available for general business activities.