KARACHI, August 26, 2021: The State Bank of Pakistan (SBP) has released the most recent exchange rates for customers on Thursday, August 26, 2021.
(more…)Author: Faisal Shahnawaz
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Dollar retreats in midday interbank trading
In midday trading on Thursday, the US dollar exhibited a decline against the Pakistani Rupee (PKR), marking a shift from its earlier gains in the day.
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Special provisions related to SMEs
In a bid to support and promote the growth of Small and Medium Enterprises (SMEs), the Federal Board of Revenue (FBR) has introduced special provisions under Section 100E of the Income Tax Ordinance, 2001.
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Tax rates on electricity consumption during 2021-2022
ISLAMABAD: The Federal Board of Revenue (FBR) has announced revised withholding tax rates for electricity consumption by both commercial and domestic consumers, effective from July 1, 2021. These updates, implemented under Section 235 of the Income Tax Ordinance, 2001, were introduced through the Finance Act, 2021.
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Tarin chairs meeting of monetary, fiscal policies board
ISLAMABAD: Finance Minister Shaukat Tarin on Wednesday chaired a meeting of the Monetary and Fiscal Policies Co-ordination Board.
Other members of the Board present in the meeting were the Adviser to the Prime Minister on Commerce & Investment, Deputy Chairman Planning Commission, Governor SBP, Dr. Asad Zaman and senior officials of the Finance Division.
Finance Minister briefed the Members of the Board on the current economic situation of the country and highlighted the major incentives given in the budget due to which business confidence is improving and economy is moving on strong economic recovery path.
It was also informed that all key economic indicators relating to real sector of the economy, fiscal sector, monetary and external sectors are going well and government is proactively executing all policy measures to achieve the major socio-economic targets of the current fiscal year.
He also highlighted the possible risks to the economic activities and strategy to counter these risks which were appreciated by the members of the Board.
Secretary Finance briefed the Members of the Board on budgetary allocations for various activities and informed about the ways and means to maintain the fiscal discipline.
He also shared the strategy to contain the non-development expenditure with the focus to optimally utilize resources of the country and improve the service delivery at large for the common man.
Governor SBP informed the Board about Monetary Policy stance. He shared the analysis of the SBP on policy rate, credit availability, exchange rate movement and inflationary situation.
He also explained that policy mix is supporting the growth momentum and highlighted the increase in commodities prices in the global market which have implications for higher import bill and inflation.
It was also informed that it is encouraging signs that exports are picking up along with increase in import of machineries which will enhance productive capacity of the economy and create exportable surplus.
He also explained the policy measures which SBP is executing to encourage business activities in various sectors of the economy and highlighted that there are ample opportunities for investors/exporters and youth of the country to take benefits from SBP’s schemes to extend or initiate their business.
Deputy Chairman Planning Commission apprised the meeting about the execution of development activities.
He also highlighted the possible options for resource mobilization and to utilize them effectively for development of potential sectors of the economy.
The Adviser to the PM on Commerce and Investment briefed about the structure of trade of the country along with major destinations.
He also presented the various measures which are under execution to enhance exports in potential areas. He also mentioned the various categories of imports which can be rationalized by focusing on their substitutes.
A comprehensive road map was also discussed to minimize trade deficit of the country. It was also highlighted that fiscal and monetary facilitation will continue for potential sectors of the economy.
Dr. Asad Zaman appreciated the major fiscal and monetary measures of the government which are supporting the business activities. He also highlighted the potential areas where Pakistan has comparative advantages in export market and also identified some low hanging fruits for import substitution.
He emphasized that the goal of well-coordinated Monetary and Fiscal Policies is to achieve full employment.
Minister for Finance & Revenue emphasized the importance of Monetary and Fiscal Policies Co-ordination Board for designing and executing policies to achieve economic targets and overcome the possible risks.
He advised to make this forum more effective for maintaining better coordination of policies to achieve the planned macroeconomic goals.
The chair urged that the Board should be more proactive in reviewing the impact of Fiscal and Monetary Policies on economic growth, employment and external sector of the economy, he concluded.
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SBP issues instructions on third party sales
KARACHI: The State Bank of Pakistan (SBP) on Wednesday issued revised instructions on sale of third party products in order to bring transparency.
In addition to the typical banking products or services, banks often offer or sell other financial products that are provided by other financial institutions, generally referred to as bancassurance or third party products.
Such offers are often prone to misdeclaration about the quality or pricing of products.
Further, banks also don’t assume any responsibility after the sale of products, which leads to difficulties for customers and disputes.
To address such concerns and bring transparency to such transactions, SBP has issued a comprehensively revised set of instructions on the sale of third party products. In addition, these instructions will also facilitate the sale of products through digital channels and promote financial inclusion.
The key features of the revised instructions are as follows:
· It will be mandatory for banks to assess the suitability of customers for the sale of third party products. In addition, they will take extra care while selling such products to vulnerable consumer segments like widows, senior citizens, etc.
· All Islamic banks along with Islamic branches of conventional banks will strictly ensure that the sale of third party products is in compliance with Shariah law and SBP regulations while their agreements with third parties should also be approved by their Shariah board.
· Banks are directed to use their audit and compliance function to ensure compliance of SBP’s regulations in their business practices related to the sale of third party products.
· Senior management and board of directors will ensure that risks to consumers in the sale of third party products are identified and addressed in a proficient manner.
· With added disclosure requirements, banks have been required to mention explicitly that the product is being sold as an agent or distributor of a third party.
· To further increase accountability of bank employees involved in selling third party products, banks have been advised to develop and enforce code of conduct.
· Banks will ensure collection/registration/analysis of consumer complaints and feedback for continuous improvements in the sale of third party products by banks.
· Banks will introduce proportionate controls to foster consumer convenience and financial inclusion, especially for less risky/small size/ low value products being sold through Alternate Delivery Channels (ADCs).
· Banks have been directed to ensure the provision of special training to their staff for the sale of third party products and take disciplinary action against the concerned employee(s) in case of fraud.
· The direct debit facility can only be used if the consent of customers is obtained in writing or through electronic means in case Alternate Delivery Channels (ADC) are used for distribution.
· Banks have been directed to design and implement a Call Back Confirmation (CBC) mechanism to ensure and verify the identity of consumers and the genuineness of the transaction. To confirm the information provided by the customer, CBC mechanism based on a predefined script should be used for suitability assessment and his/her understanding of the product.
The instructions will be applicable from November 01, 2021, and will supersede previous instructions issued vide CPD Circular No.2 of 2012.
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KIBOR rates on August 25, 2021
KARACHI: State Bank of Pakistan (SBP) on Wednesday issued following Karachi Interbank Offered Rates (KIBOR) on August 25, 2021.
Tenor BID OFFER 1 – Week 6.88 7.38 2 – Week 6.94 7.44 1 – Month 7.01 7.51 3 – Month 7.16 7.41 6 – Month 7.31 7.56 9 – Month 7.44 7.94 1 – Year 7.51 8.01 -
Dollar moves up sharply to Rs166.28 in interbank
KARACHI: The Pak Rupee sharply fell by Rs1.08 against the dollar on Wednesday owing to rise in import payment demand.
The rupee ended Rs166.28 to the dollar from the previous day’s closing of Rs165.20 in the interbank foreign exchange market.
The rupee fell to a year low against the dollar. Previously, the rupee fell to Rs166.24 to the dollar on August 31, 2020.
Currency experts said that mounting demand for import payment had deteriorated the rupee value.
They said that ease in coronavirus restrictions and rise in international oil prices increased the demand for dollars for import payments.
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SBP issues customers exchange rates on August 25
KARACHI, August 25, 2021: The State Bank of Pakistan (SBP) has issued the latest exchange rates for customers on Wednesday, August 25, 2021.
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Special tax provisions for non-ATL persons
Section 100BA of the Income Tax Ordinance, 2001 introduces special provisions for persons not appearing on the Active Taxpayers’ List (ATL).
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