The State Bank of Pakistan (SBP) has allowed commercial banks to increase board members’ meeting fees by up to 50 percent per meeting. This change applies to meetings held under the chairmanship of the bank.
According to an SBP circular, commercial banks with assets over Rs. 1 trillion or after-tax profits of at least Rs. 5 billion may now pay up to Rs. 1.2 million to a director for attending a single board meeting. Previously, the limit was Rs. 0.8 million.
For banks with assets below Rs. 1 trillion and after-tax profits under Rs. 5 billion, the revised cap is Rs. 0.75 million per director per meeting. Earlier, these banks could pay a maximum of Rs. 0.5 million. The changes have been introduced through amendments to the Corporate Governance Regulatory Framework.
Banks typically hold four board meetings annually. The board usually includes the chief executive officer, executive directors, nominee directors, and independent directors. They are responsible for key business decisions and oversee committees such as human resources and information technology.
Under the new SBP framework, directors performing extra responsibilities may receive up to 20 percent additional remuneration. This requires shareholder approval and proper justification in the bank’s remuneration policy.
The SBP also clarified that directors’ travel, boarding, and lodging expenses for attending board or committee meetings, as well as domestic training, will be reimbursed at actual cost. Any additional costs will be borne by the director.
Board remuneration varies across banks depending on the number of directors and fee structures. In 2024, Meezan Bank paid Rs. 65.4 million to its eight board members. United Bank Limited paid Rs. 117 million to eight directors, while Standard Chartered Bank paid Rs. 28.7 million in remuneration and allowances.
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The SBP said the revised limits aim to standardize board fees while ensuring directors are fairly compensated for their duties and responsibilities.
