BSD Circular No.

13 March 26, 2001

The Chief Executives,

All Banks.

Dear Sirs / Madam,

CREDIT CARD OPERATIONS

With a view to provide adequate safety parameters for the growth of domestic credit card operations and
to protect the banks’ and the customers’ interests alike, the following general guidelines are issued for
compliance by all banks:

a) The domestic credit card operations shall be deemed to be a part of bank’s lending activity
and as such shall be governed by the rules and regulations relating to the grant of loans and advances.
Accordingly, banks shall monitor the credit card portfolio regularly and ensure to institute proper
machinery for speedy recovery of dues and effective follow-up of unpaid dues.

b) Terms and conditions regarding the issue and use of the credit cards shall be properly
documented in the form of a written contract between the bank and the credit card holders.
These conditions must clearly highlight the cardholder’s liabilities and obligations, eligibility
conditions, fees, charges, service fee rate and their method of calculation etc. No charge shall
be recoverable from the credit card holders other than agreed to as per the contract.

c) Banks shall provide the credit card holders with the statements of account at monthly
intervals, unless there has been no transaction or no outstanding balance on the account since
last statement.

d) Banks shall be liable for all transactions not authorized by the credit card holders after it
has been properly served with a notice that the card has been lost/stolen. However, the
bank’s liability shall be limited to those amounts wrongly charged to the credit card holder’s
account.

e) The banks engaged in domestic credit card business are required to furnish the State Bank
of Pakistan with a quarterly report on their domestic credit card operations within 15 days of
the close of each quarter. The banks shall also report to the State Bank of Pakistan cases of
frauds/forgeries in credit card operations as and when they occur.

f) Any violation or circumvention to the above guidelines shall render the banks and
official(s) concerned liable to penal action under the relevant provisions of the Banking
Companies Ordinance, 1962.

Please acknowledge receipt

Yours faithfully,
(KAZI ABDUL MUKTADIR)
Director