KARACHI - A total of 13 commercial banks out of 36, operating in Pakistan, failed to meet the Minimum Capital Requirement (MCR) of Rs 6 billion in CY09 that was set by the SBP for the banks, The Nation learnt through reliable banking sources on Monday. Sources, while citing the position of banks in MCR, said that as of 31 December, 2009, overall 23 banks, including 1 public sector, 14 private, 2 Islamic and 6 foreign banks were successfully met the needed level of Rs 6 billion with free of losses, however, 13 banks remained non-complaint with the said SBP regulation of minimum paid up capital during the prescribed course of last calendar year. Bank-wise summary revealed that 6 local commercial banks in the private sector and 4 Islamic banks were also unable to meet the MCR within the given period of time. According to sources, the SBP is closely monitoring the compliance of capital position of individual banks to ensure safety and soundness of the institutions as well as banking system of the country. In this regard, banks that are short in their MCR have been asked to put in place concrete capital enhancement plans. Sources further said SBP is also in the process of taking up the capital enhancement of public sector non-compliant banks with relevant authorities. As per the statistics available with The Nation, two private banks have already brought in money from sponsors in the form of advance against Right Share Issue. Besides, 6 private banks including Islamic banks are in the various stages of the process of merger/acquisition to improve their capital position. Moreover, 2 private banks are in the process of completing formalities of Right Shares Issuance. It may be mentioned here that from 31st December 2009, the Minimum Capital Requirement for commercial banks is Rs.6 billion (net of losses), increased from Rs.5 billion required as on 31st December 2008. Moreover, for foreign banks operating in branch mode, the requirement is Rs2.0 billion. SBP Spokesman Syed Wasimuddin, while talking to The Nation, said the non-compliant banks have requested SBP for granting extension in the MCR requirement. In special correspondences and meetings with the monitoring and surveillance department of the central bank, such banks have assured that they would fulfil the MCR obligation by the first and second quarters of current calendar year. Meanwhile, a senor analyst from the Invest Cap research told that SBP might accommodate the non-compliant banks with 3-6 months extension. He said amongst public sector banks, First Women Bank is facing the acute shortage of capital in meeting paid up capital requirement. In the same way, the announcement of right shares from the Bank of Punjab is still awaited whereby the Government of Punjab has already provided Rs10 billion in this regard. He said that ongoing M&A activities in the private sector, banks would result in compliance as the 3 banks (Atlas, Arif Habib and My Bank) acquisition by Suroor Investment is in process. On the other hand, Silk Bank passed the special resolution to issue right shares for Rs7 billion to comply with the requirement.