SBP doubles banks' private equity fund investment limit to 20% as Pakistan advances reforms

The State Bank of Pakistan has raised the maximum amount banks can place in any one private equity fund to 20%, from 10%, as work continues on a national framework for the sector. Profit by Pakistan Today reported that the change was discussed at the framework committee’s third meeting, chaired by Finance Minister Muhammad Aurangzeb.

The committee also reviewed proposed tax treatment under which private equity funds would pass income through to investors for taxation, rather than being taxed at fund level. Its discussions covered transparency, fund structures and ways to channel domestic capital from banks, insurers, mutual funds, pension schemes and development finance institutions into viable investments. The government says the reforms are intended to strengthen domestic capital markets and improve access to long-term risk funding.