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Author: Mrs. Anjum Shahnawaz

  • PMRC, HBL Islamic Banking raise Rs1bn Sukuk

    PMRC, HBL Islamic Banking raise Rs1bn Sukuk

    KARACHI: Pakistan Mortgage Refinance Company (PMRC) announced the closing of another Sukuk with HBL Islamic Banking.

    A statement issued on Wednesday said that the sukuk will serve to make Shariah Compliant Housing Finance more accessible to the public.

    On the occasion Mudassir CEO/MD PMRC said: “PMRC is delighted to partner with HBL Islamic Banking for this Sukuk.

    “The funds raised under this Sukuk are important for the promotion of the Islamic housing finance market.

    “I am confident this will be beneficial in the growth of fixed-rate, low-cost housing for the end consumers.”

    Muhammad Afaq Head HBL Islamic Banking said: “HBL Islamic Banking is pleased to be collaborating with PMRC in the placement of the Rs1 billion Sukuk.

    “The funds will be used to promote financing in the housing sector of Pakistan with a special focus on low-cost housing initiatives.

    “This will enable us to play our part in the economic development of the country.”

  • SBP allows banks to charge fee on high value transactions

    SBP allows banks to charge fee on high value transactions

    KARACHI: State Bank of Pakistan (SBP) on Wednesday allowed banks to charge a minimal fee on high-value transactions of Interbank Fund Transfer (IBFT).

    The central bank in a statement said that the new instructions allow banks and other service providers to charge a minimal fee on high-value transactions while protecting and encouraging the low-income segments of population to continue using digital transactions free of cost.

    The SBP directed banks to provide free of cost digital fund transfer services to individual customers up to, at least, a minimum aggregate sending limit of Rs25,000 per month per account/wallet. However, banks may choose to set this aggregate limit at a higher amount as well.

    This would allow individual customers to make as many free fund transfer transactions remaining within their aggregate monthly limit of free transfers.

    For transactions above the aggregate limit of Rs25,000 per account in a month, banks may charge individual customers, a transaction fee of no more than 0.1% of the transaction amount or Rs200, whichever is lower.

    This will enable service providers to recover part of costs they incur on providing inter-bank fund transfer service and build sustainable and innovative business models.

    Nevertheless, the new instructions encourage banks to provide free of cost digital fund transfer services to their customers to promote adoption of digital payments in the country.

    SBP has also advised banks that all digital fund transfer transactions between different accounts within the same bank (intra-bank fund transfers) shall remain free. Further, incoming interbank fund transfer transactions shall also remain free. SBP has further directed banks to ensure proper disclosure of charged and free IBFT amounts along with applicable fees to their customers by sending regular notifications through SMS, apps and email. After every digital transaction, banks are required to send free of charge SMS to their customers on their registered mobile numbers intimating them about the transaction amount and the charges being recovered.

    In order to provide seamless digital banking services to the public, SBP has further advised banks to remove any limits on the number of fund transfer transactions on their customer accounts/wallets unless there are genuine concerns related to AML/CFT or frauds.

    To cope with the extraordinary situation of lockdowns amid Covid-19 Pandemic in 2020, SBP advised banks and other service providers in March 2020 to offer free of cost Inter Bank Fund Transfer (IBFT) services to all their customers regardless of the size of transaction.  The objective was to facilitate bank customers to meet their banking services needs through online services during exceptionally difficult times and to avoid in person interaction to curb the spread of COVID. This step resulted in an overwhelming response by customers, with internet and mobile banking transactions more than doubling in Q2FY21 over the last year.

    The SBP appreciates the support of all service providers for this initiative by allowing free of cost interbank fund transfer services to the public without recovering their operational cost and incurring substantial revenue losses.

    It is encouraging that the Covid-19 situation has improved significantly and despite fluctuating number of cases the overall conditions now allow relaxations in mobility restrictions while following proper SOPs.  In this backdrop, SBP reviewed the current IBFT pricing mechanism and has made some changes to ensure that free of charge IBFT services are provided by banks and other financial institutions on a sustainable basis.

  • Stock market ends down by 152 points on selling pressure

    Stock market ends down by 152 points on selling pressure

    KARACHI: The stock market ended down by 152 points on Wednesday amid selling pressure witnessed during the day. The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 48,481 points as against previous day’s closing of 48,633 points, showing a decline of 152 points.

    Analysts at Arif Habib Limited said that the market saw persistent selling pressure that was felt across the board and made the index trade between -201 points and +246 points, closing the session -152 points.

    Among E&P, OGDC and PPL both traded below LDCP against POL, which showed price uptick. Cement sector also traded in a narrow range. Although KEL & WTL retained top slot, volumes remained relatively low. Among scrips, KEL realized 114.9 million shares in trading, followed by WTL (86.4 million) and BYCO (63 million).

    Sectors contributing to the performance include Textile (+25 points), Cement (-54 points), Banks (-33 points), Chemical (-24 points), Fertilizer (-17 points) and Pharma (-16 points).

    Volumes declined from 1224.5 million shares to 936.7 million shares (-24 percent DoD). Average traded value also declined by 21 percent to reach US$ 142.7 million as against US$ 179.8 million.

    Stocks that contributed significantly to the volumes include KEL, WTL, BYCO, HASCOL and GGGL, which formed 38 percent of total volumes.

    Stocks that contributed positively to the index include HUBC (+27 points), PAKT (+17 points), POL (+16 points), KTML (+16 points) and SRVI (+9 points). Stocks that contributed negatively include ENGRO (-21 points), PPL (-17 points), COLG (-15 points), KEL (-14 points) and DGKC (-14 points).

  • Rupee weakens by 17 paisas against dollar

    Rupee weakens by 17 paisas against dollar

    KARACHI: The Pak Rupee fell by 17 paisas against the dollar on Wednesday as demand remained high for import and corporate payments.

    The rupee ended Rs156.96 to the dollar from previous day’s closing of Rs156.79 in the interbank foreign exchange market.

    The dollar in interbank appreciated by Rs4.68 since May 07, 2021. The dollar was at Rs152.28 in the interbank foreign exchange market on May 07, 2021.

  • Additional withholding tax imposed on cars sold without registration

    Additional withholding tax imposed on cars sold without registration

    KARACHI: The application of withholding tax on cars / motor vehicles that are sold without registration shall pay additional withholding income tax.

    According to the Finance Bill, 2021 the withholding tax in addition to registration/transfer would be applicable and the same would be collected by the motor vehicle registration authority of Excise and Taxation Department if manufactured motor vehicles sold prior to registration by the person who originally purchased it from the local manufacturer.

    Tax analysts at KPMG Taseer Hadi Chartered Accountants said that Tax Laws (Amendment) Ordinance, 2021 inserted sub-section (2A) in Section 231B, whereby, every motor vehicle registration authority of Excise and Taxation Department shall collect advance tax at the time of sale of such vehicles from buyers of locally manufactured vehicles who sell the vehicles within 90 days of taking delivery from the local manufacturers/assemblers, whether or not registered by the respective authorities.

    The rates of withholding tax on motor vehicles sold prior registration are:

    Up to 1000CC: Rs50,000

    1000CC to 2000CC: Rs100,000

    2000CC and above: Rs200,000

    The tax analysts said that above rates were applicable till June 30, 2021.

    However, the Finance Bill, 2021 proposed to continue the provision. However, the restriction of 90 days is proposed to be done away with.

  • State Bank renews credit rating agencies status

    State Bank renews credit rating agencies status

    KARACHI: The State Bank of Pakistan (SBP) on Tuesday renewed the status of both credit rating agencies operating in Pakistan namely ‘VIS Credit Rating Company Limited (VIS)’ and ‘The Pakistan Credit Rating Agency Limited (PACRA)’ as eligible / recognized External Credit Assessment Institutions (ECAIs) for the calendar year 2021. 

    Banks and DFIs using the standardized approach of Basel framework are allowed to use credit ratings assigned by VIS and PACRA for CAR calculation purposes, the central bank added.

  • Telecom sector gets relief measures in budget 2021/2022

    Telecom sector gets relief measures in budget 2021/2022

    ISLAMABAD: The telecommunication sector has received several relief measures in the federal budget 2021/2022 that will help new investment in this sector.

    According to budget commentary released by KPMG Taseer Hadi & Co. Telecommunication is one of the largest service sectors of Pakistan contributing substantial revenue in the form of taxes on telecom services and income tax on profits.

    The Finance Bill 2021 proposes several relief measures for this sector, some of them were being demanded for long, such as grant of ‘industry’ status for tax purposes.

    These measures will help to attract investment in telecom infrastructure and reduce the cost of doing business and consequential relief to the public.

    Following tax relief measures are proposed for this sector:

    —Grant of industry status which will resolve several anomalies in taxation of this sector. Also, it will make it possible for telecom companies to import plant and machinery without collection of advance tax after obtaining exemption certificate from the Commissioner.

    —Reduction in rate of withholding tax on receipts from 8% at present to 3%. As the said tax is also minimum tax, this will entail a reduction of 62.5% in effective tax rate on income for those with low profits.

    —Reduction in rate of federal excise duty on telecom services from 17 percent to 16 percent. This will however only be relevant for services rendered in Islamabad as services rendered in provinces are subject to provincial sales tax.

    —Abolition of fixed sales tax on SIM cards. However, this will not affect existing cases in litigation.

  • Penalty imposed for non-declaration of business bank account

    Penalty imposed for non-declaration of business bank account

    ISLAMABAD: The Federal Board of Revenue (FBR) has been authorized to impose penalty on taxpayers who fail to declare their bank accounts.

    According to budget 2021/2022 commentary issued by KPMG Taseer Hadi & Co. the Finance Bill 2021 proposed a new definition of “business bank account” to mean a bank account utilized by the taxpayer for business transaction declared to the Commissioner through original or modified registration form prescribed under section 181.

    The form under section 181is available on IRIS wherein the taxpayer is required to declare bank account which would be treated as business bank account.

    The Bill proposes to beef-up the documentation of taxpayer by prescribing specific penalty and prosecution provisions on non-declaration of bank account.

    Where any person fails to declare business bank account(s), in his registration application or fails to amend his registration profile to declare existing business bank account(s), such person shall pay a penalty of Rs. 10,000 for each day of default since the date of submission of application for registration or date of opening of undeclared business bank account whichever is later subject to minimum penalty of Rs.100,000 per undeclared bank account. This provision is proposed to be effective from 1st October 2021.

  • Foreign investors praise State Bank for facilitating remittances

    Foreign investors praise State Bank for facilitating remittances

    KARACHI: Foreign investors operating in the country have appreciated the significant improvement in the foreign exchange remittance processing time and in growing engagement of the State Bank of Pakistan (SBP) leadership with the key stakeholders.

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  • Stock market ends down in range bound trading

    Stock market ends down in range bound trading

    KARACHI: The stock market ended down by 94 points on Tuesday while trading in range bound on account of profit booking.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 48,633 points as against previous day’s closing of 48,726 points, showing decline of 94 points.

    Analysts at Arif Habib Limited said that the market traded range bound today on account of profit booking particularly in refinery, steel, cement and E&P sectors.

    Index oscillated between -215 points and +115 points, closing the session -94 points. Technology sector failed to bounce back in the past sessions and similar downtrend was witnessed today.

    E&P sector saw prominence of OGDC on the back of anticipated dividend payout, whereas Fertilizer sector remained under pressure after less than anticipated takeaways from the recently announced budget.

    Among scrips, KEL topped the volumes with 312.9 million shares, followed by WTL (147.6 million) and BYCO (129.3 million).

    Sectors contributing to the performance include Power (+80 points), Chemical (+12 points), Banks (-46 points), E&P (-45 points), Refinery (-24 points).

    Volumes increased from 1217.8 million shares to 1224.6 million shares (+0.5 percent DoD). Average traded value declined by 34 percent to reach US$ 180.7 million as against US$ 274.4 million.

    Stocks that contributed significantly to the volumes include KEL, WTL, BYCO, HASCOL and POWER, which formed 55 percent of total volumes.

    Stocks that contributed positively to the index include HUBC (+52 points), KEL (+29 points), TRG (+28 points), FFC (+18 points) and PSO (+11 points). Stocks that contributed negatively include PPL (-32 points), LUCK (-21 points), SYS (-18 points), ENGRO (-17 points) and EFERT (-15 points).