KARACHI (December 09 2006): The State Bank of Pakistan has decided to relax the condition of obtaining 'Board Resolution' and 'Certificate of Commencement of Business' for opening bank account of only those foreign companies which belong to countries where similar requirements are not enforced under their rules and regulations.
The central bank, in a letter to the presidents and chief executives of banks and DFIs on Friday, said that in a few countries, passing of a 'Board Resolution' for the purpose of opening bank account is not in vogue, and 'Certificate of Commencement of Business' is also not issued by any institution/body. As a result, banks have been approaching SBP quite often for relaxation of the said conditions under Prudential Regulation-M1 for opening accounts of such entities.
The matter was considered and reviewed and it has been decided to relax the condition of obtaining Board Resolution and Certificate of Commencement of Business for opening bank account of only such foreign companies/entities belonging to countries where the said requirements are not enforced under their laws and regulations.
However, such foreign companies will have to furnish the following documents in lieu of 'resolution' passed by BoD for opening of account and Certificate of Commencement of Business to the satisfaction of their banks: a) Power of Attorney from the competent authority for opening bank accounts, b) a certificate from the company Secretary, duly authorised by the Board, that the entity started its business from certain date and that certificate of commencement of business is not issued in that country.
In this respect, the central bank has asked the bankers/DFIs to refer to Prudential Regulation M-1 that requires minimum set of documents to be obtained by banks/DFIs for opening bank account of various categories of customers.
The requirement of documents for opening of a bank account for Joint Stock Companies, inter alia includes Resolution of Board of Directors authorising a specific person(s) to operate the company's account and Certificate of Commencement of Business.