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Category: Money & Banking

Money and banking drive economic activity by facilitating transactions, savings, and investments. Banks manage financial resources, offer credit, and regulate money supply, ensuring stability and growth in Pakistan’s financial sector.

  • Action against banks for overcharging on LCs by month-end

    Action against banks for overcharging on LCs by month-end

    ISLAMABAD: State Bank of Pakistan (SBP) on Wednesday said it has finalized to take action against banks involved in overcharging on opening of Letters of Credit (LCs).

    The National Assembly Standing Committee on Finance and Revenue was informed here on Wednesday that the actions against eight banks involved in overcharging on opening of LC would be taken by the end of current month.

    READ MORE: Dollar climbs to PKR 222.41 amid foreign payment demand

    While briefing the Committee, Deputy Governor State Bank of Pakistan (SBP), Dr. Inayat Hussain said that in light of inspection findings, SBP is also in process of completing the enforcement action against the concerned banks.

    The Committee met under the Chairmanship of Qaiser Ahmed Sheikh and discussed various issues pertaining to the Ministry and its attached departments.

    The Chairman of the Committee said that now the monitoring process of the Central Bank has been tightened and no complaints have been received yet.

    READ MORE: SBP introduces reporting system for illegal foreign exchange activity

    Inayat said the shortage of dollars in the market is due to the gap between import and export and foreign exchange is also required for balance of payment.

    He highlighted that the shortage occurs when Dollar inflow is less than the outflow. These are the reasons for the increase in the rate of the Dollar and the depreciation of the rupee, he added.

    MNA Sabir Hussain Kaim Khani said that National Bank of Pakistan (NBP) was also responsible for the devaluation of the rupee and increase in the rate of Dollar. He questioned how will we stop others when a government bank does this.

    The Chairman of the Committee said that Banks were still saying that they don’t have Dollars and market confidence was affected due to fluctuations in the value of the rupee.

    READ MORE: Pakistan remittances decline by 15.7% in October 2022

    Dollar is worth Rs 222 in the market and there is a difference of 15 rupees in the interbank and open market, he added.

    Governor State Bank should should come to respond to this, Barjees Tahir said.

    MNA Khalid Hussain Magsi said that now the economy was not in right direction because we have not set the direction.

    Meanwhile discussing the issue of allocation of funds to National Disaster Management Authority (NDMA) and essential items provided to the floods affectees, the official of NDMA informed that the authority disbursed around 283,934 tents, 77,585 tarpaulins, 2,044,104 mosquito nets, 234,545 blankets.

    MNA Nafisa Shah said that according to her information, around 4 to 5 thousand children were died of Malaria in Khairpur district but there was no data available on flood victims. She said that things were given twice in each house and compiling data of flood victims was the biggest responsibility.

    READ MORE: Pakistan banks may issue corporate cards for cross-border commercial payments

    Zarai Taraqiati Bank Limited (ZTBL) briefed the Committee on its overall performance, however the Committee was not satisfied with the briefing and allowed three months’ time asking it to come again with better preparation.

    The Committee also asked ZTBL President to ensure his presence in the next meeting.

  • Dollar climbs to PKR 222.41 amid foreign payment demand

    Dollar climbs to PKR 222.41 amid foreign payment demand

    KARACHI: The US dollar rallied against the Pakistani Rupee (PKR) on Wednesday amid escalating demand of the foreign currency for import and corporate payments.

    The exchange rate witnessed a decline of 50 paisas in rupee value to end at PKR 222.41 to the dollar from previous day’s closing of PKR 221.91 in the interbank foreign exchange market.

    It was fourth consecutive session when the rupee witnessed a decline against the dollar.

    READ MORE: Dollar end up to PKR 221.91 in interbank on November 15, 2022

    Currency experts said that the local currency was under immense pressure due to high demand of the foreign currency for import and corporate payments.

    They further said that declining foreign exchange reserves also put pressure on exchange rate.

    Pakistan foreign exchange reserves slipped sharply by $958 million by week ended November 08, 2022 owing to external payments, State Bank of Pakistan (SBP) said a day earlier.

    READ MORE: Dollar extends gain to PKR amid falling foreign exchange reserves

    The foreign exchange reserves of the country have been recorded at $13.721 billion by week ended November 04, 2022 as compared with $14.679 billion a week ago i.e. October 28, 2022.

    The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.507 billion.

    The official foreign exchange reserves of the State Bank plunged by $958 million to $7.957 billion by week ended November 04, 2022 as compared with $8.913 billion a week ago.

    READ MORE: PKR slips to dollar as foreign exchange reserves fall sharply

    The SBP attributed the decline to external debt servicing. “Major external debt repayments executed during the week includes repayment of government commercial loans. Refinancing of these loans is in process which will improve foreign exchange reserves in coming weeks,” the central bank added.

    The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP dropped by $12.189 billion.

    The central bank has taken various measures to monitor outflow of the foreign currency in order to stabilize the rupee value.

    READ MORE: Rupee makes recovery as limit imposed on dollar cash movement

    Currency experts said that the latest measures of the government to limit the cash dollar taking out of Pakistan supported the local currency to make gain.

    On November 08, 2022, the SBP issued a circular to restrict the amount of foreign currency in cash up to equivalent to USD 5,000 from USD 10,000.

    The central bank issued a circular stating that it had reviewed the existing foreign currency cash carrying limits for travel purposes, and decided to further rationalize the same.

    As per the revised limits individuals with age 18 years and above (adults) can now take out of Pakistan foreign currency (FCY) equivalent to USD5,000 per visit, while those below the age of 18 years (minors) can carry out foreign currency equivalent to USD2,500 per visit. Further, the annual ceiling to take out FCY for adults and minors shall be USD30,000 and USD15,000, respectively.

  • Dollar end up to PKR 221.91 in interbank on November 15, 2022

    Dollar end up to PKR 221.91 in interbank on November 15, 2022

    KARACHI: The US dollar ended up by 22 paisas against the Pakistani Rupee (PKR) on Tuesday to end at PKR 221.91 in interbank foreign exchange market.

    The exchange rate ended with 22 paisas decline in rupee value to end at PKR 221.91 to the dollar from last day’s closing of PKR 221.69 in the interbank foreign exchange market.

    READ MORE: Dollar extends gain to PKR amid falling foreign exchange reserves

    The rupee witnessed third consecutive day decline since reports of falling foreign exchange reserves.

    Currency dealers said that the market sentiments were negative due to sharp decline in foreign exchange reserves.

    Pakistan foreign exchange reserves slipped sharply by $958 million by week ended November 08, 2022 owing to external payments, State Bank of Pakistan (SBP) said a day earlier.

    READ MORE: PKR slips to dollar as foreign exchange reserves fall sharply

    The foreign exchange reserves of the country have been recorded at $13.721 billion by week ended November 04, 2022 as compared with $14.679 billion a week ago i.e. October 28, 2022.

    The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.507 billion.

    The official foreign exchange reserves of the State Bank plunged by $958 million to $7.957 billion by week ended November 04, 2022 as compared with $8.913 billion a week ago.

    READ MORE: Rupee makes recovery as limit imposed on dollar cash movement

    The SBP attributed the decline to external debt servicing. “Major external debt repayments executed during the week includes repayment of government commercial loans. Refinancing of these loans is in process which will improve foreign exchange reserves in coming weeks,” the central bank added.

    The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP dropped by $12.189 billion.

    The central bank has taken various measures to monitor outflow of the foreign currency in order to stabilize the rupee value.

    Currency experts said that the latest measures of the government to limit the cash dollar taking out of Pakistan supported the local currency to make gain.

    READ MORE: PKR ends stable against US dollar in interbank

    On November 08, 2022, the SBP issued a circular to restrict the amount of foreign currency in cash up to equivalent to USD 5,000 from USD 10,000.

    The central bank issued a circular stating that it had reviewed the existing foreign currency cash carrying limits for travel purposes, and decided to further rationalize the same.

    As per the revised limits individuals with age 18 years and above (adults) can now take out of Pakistan foreign currency (FCY) equivalent to USD5,000 per visit, while those below the age of 18 years (minors) can carry out foreign currency equivalent to USD2,500 per visit. Further, the annual ceiling to take out FCY for adults and minors shall be USD30,000 and USD15,000, respectively.

  • Dollar extends gain to PKR amid falling foreign exchange reserves

    Dollar extends gain to PKR amid falling foreign exchange reserves

    KARACHI: The US dollar extended gain against the Pakistani Rupee (PKR) on Monday amid falling foreign exchange reserves of the country.

    The exchange rate ended with five paisas decline in rupee value to end at PKR 221.69 to the dollar from last Friday’s closing of PKR 221.64 in the interbank foreign exchange market.

    READ MORE: PKR slips to dollar as foreign exchange reserves fall sharply

    Currency dealers said that the market sentiments were negative due to sharp decline in foreign exchange reserves.

    Pakistan foreign exchange reserves slipped sharply by $958 million by week ended November 08, 2022 owing to external payments, State Bank of Pakistan (SBP) said a day earlier.

    The foreign exchange reserves of the country have been recorded at $13.721 billion by week ended November 04, 2022 as compared with $14.679 billion a week ago i.e. October 28, 2022.

    READ MORE: Rupee makes recovery as limit imposed on dollar cash movement

    The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.507 billion.

    The official foreign exchange reserves of the State Bank plunged by $958 million to $7.957 billion by week ended November 04, 2022 as compared with $8.913 billion a week ago.

    The SBP attributed the decline to external debt servicing. “Major external debt repayments executed during the week includes repayment of government commercial loans. Refinancing of these loans is in process which will improve foreign exchange reserves in coming weeks,” the central bank added.

    The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP dropped by $12.189 billion.

    READ MORE: PKR ends stable against US dollar in interbank

    The central bank has taken various measures to monitor outflow of the foreign currency in order to stabilize the rupee value.

    Currency experts said that the latest measures of the government to limit the cash dollar taking out of Pakistan supported the local currency to make gain.

    On November 08, 2022, the SBP issued a circular to restrict the amount of foreign currency in cash up to equivalent to USD 5,000 from USD 10,000.

    READ MORE: SBP limits cash up to USD 5,000 taking out of Pakistan

    The central bank issued a circular stating that it had reviewed the existing foreign currency cash carrying limits for travel purposes, and decided to further rationalize the same.

    As per the revised limits individuals with age 18 years and above (adults) can now take out of Pakistan foreign currency (FCY) equivalent to USD5,000 per visit, while those below the age of 18 years (minors) can carry out foreign currency equivalent to USD2,500 per visit. Further, the annual ceiling to take out FCY for adults and minors shall be USD30,000 and USD15,000, respectively.

  • SBP introduces reporting system for illegal foreign exchange activity

    SBP introduces reporting system for illegal foreign exchange activity

    KARACHI: State Bank of Pakistan (SBP) on Friday introduced a reporting system for illegal foreign exchange activity.

    The central bank said in order to promote an environment of accountability and integrity, State Bank of Pakistan (SBP) has introduced a dedicated email address i.e. ([email protected]), using which public at large can report to SBP any unauthorized foreign exchange activity.

    This email may also be used to report any unauthorized activity carried out by an exchange company or where exchange company is not providing system generated receipt of the currency exchange transaction.

    While reporting an unauthorized foreign exchange activity, the complainant is expected to provide facts and as much specific information and particulars as possible to examine the matter thoroughly.

    They are also expected to refrain from rumor mongering, speculation, false and frivolous allegations/accusations. The disclosure of identity for utilizing this forum is voluntary; however, if shared the identity will be kept confidential. The public at large is encouraged to be judicious in reporting incidents.

    Further, if a person faces any issue in dealing with exchange companies, he/she may share the concerns at [email protected].

    Examples of such issues may include but are not limited to sale/purchase of foreign currency notes by Exchange Companies issuing receipts which are not system generated, charging exorbitantly high exchange rate over those displayed on the notice board, denial of genuine requests of the customer for provision of foreign currencies, etc.

    Foreign Exchange business in Pakistan is regulated by State Bank of Pakistan (SBP) under Foreign Exchange Regulation Act, 1947. Under the aforesaid Act, SBP has authorized twenty six Exchange Companies of “A” category and twenty Exchange Companies of “B” category to deal in foreign exchange business including sale purchase of foreign currency notes. The list of authorized outlets of exchange companies of “A” & “B” category can be accessed at the following link: https://www.sbp.org.pk/epd/pdf/NetworkExchangeCompaniesSector.pdf

  • Pakistan remittances decline by 15.7% in October 2022

    Pakistan remittances decline by 15.7% in October 2022

    KARACHI: Inflow of workers remittances has declined by 15.7 per cent in the month of October 2022 when compared with the same month of the last year, according to data released by State Bank of Pakistan (SBP) on Friday.

    READ MORE: Home remittances decline to $7.68 billion in 1QFY23

    The inflows of home remittances fell to $2.215 billion in October 2022 when compared with $2.628 billion in the same month of the last year.

    The remittances in October 2022 also witnessed a fall of 9 per cent when compared with $2.437 billion received during the month of September 2022.

    READ MORE: Pakistan remittances from Saudi Arabia fall by 7.5% in two months

    Remittances inflows during October 2022 were mainly sourced from Saudi Arabia ($570.5 million), the United Arab Emirates ($427 million), the United Kingdom ($278.8 million) and the United States of America ($253.1 million).

    The cumulative inflow declined by 8.6 per cent to $9.9 billion during first four months of the current fiscal year.

    READ MORE: State Bank signs deal to analyze property prices

    The inflow of remittances has been recorded at $9.9 billion during July – October of current fiscal year 2022/2023 as compared with $10.83 billion in the corresponding period of the last fiscal year.

    READ MORE: SBP bars banks from taking service charges on flood donations

  • PKR slips to dollar as foreign exchange reserves fall sharply

    PKR slips to dollar as foreign exchange reserves fall sharply

    KARACHI: Pakistani Rupee (PKR) slipped against the US dollar on Friday owing to massive decline in foreign exchange reserves of the country.

    The exchange rate witnessed a decline of 22 paisas in rupee value to end at PKR 221.64 to the dollar from previous day’s closing of PKR 221.42 in interbank foreign exchange market.

    READ MORE: Rupee makes recovery as limit imposed on dollar cash movement

    Currency experts said that the devaluation in rupee value came after significant decline in foreign exchange reserves was recorded.

    Pakistan foreign exchange reserves slipped sharply by $958 million by week ended November 08, 2022 owing to external payments, State Bank of Pakistan (SBP) said a day earlier.

    The foreign exchange reserves of the country have been recorded at $13.721 billion by week ended November 04, 2022 as compared with $14.679 billion a week ago i.e. October 28, 2022.

    The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $13.507 billion.

    READ MORE: PKR ends stable against US dollar in interbank

    The official foreign exchange reserves of the State Bank plunged by $958 million to $7.957 billion by week ended November 04, 2022 as compared with $8.913 billion a week ago.

    The SBP attributed the decline to external debt servicing. “Major external debt repayments executed during the week includes repayment of government commercial loans. Refinancing of these loans is in process which will improve foreign exchange reserves in coming weeks,” the central bank added.

    The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP dropped by $12.189 billion.

    The central bank has taken various measures to monitor outflow of the foreign currency in order to stabilize the rupee value.

    Currency experts said that the latest measures of the government to limit the cash dollar taking out of Pakistan supported the local currency to make gain.

    READ MORE: SBP limits cash up to USD 5,000 taking out of Pakistan

    On November 08, 2022, the SBP issued a circular to restrict the amount of foreign currency in cash up to equivalent to USD 5,000 from USD 10,000.

    The central bank issued a circular stating that it had reviewed the existing foreign currency cash carrying limits for travel purposes, and decided to further rationalize the same.

    As per the revised limits individuals with age 18 years and above (adults) can now take out of Pakistan foreign currency (FCY) equivalent to USD5,000 per visit, while those below the age of 18 years (minors) can carry out foreign currency equivalent to USD2,500 per visit. Further, the annual ceiling to take out FCY for adults and minors shall be USD30,000 and USD15,000, respectively.

    READ MORE: US Dollar falls by 26 paisas to PKR 221.66 in interbank market

  • Pakistan banks may issue corporate cards for cross-border commercial payments

    Pakistan banks may issue corporate cards for cross-border commercial payments

    KARACHI: State Bank of Pakistan (SBP) has allowed banks to issue corporate cards to their business customers for making cross-border commercial payments.

    The SBP through a circular dated November 08, 2022 issued to presidents and chief executives of authorized dealers (ADs) in foreign exchange said that banks desirous to facilitate their business customers may issue corporate cards, to be used strictly in accordance with the applicable provisions of the Foreign Exchange Manual and the profile of the customer. “ADs shall institute a robust mechanism to monitor the payments through such corporate cards,” the SBP added.

    READ MORE: State Bank, NBP to withdraw petitions in Riba case: Ishaq Dar

    According the circular the central bank had observed individuals were using their debit/credit cards for cross-border transactions, which are of commercial nature and are not aligned with their personal needs as well as their risk profile.

    In order to ensure judicious use of cards, including virtual cards, it has been decided to place an annual limit of $30,000 per individual on card based cross-border transactions. For the purpose of this circular, the year will start from November 1, 2022, however, limit for the current year will be calculated from the date of issuance of this circular. This limit would be applicable for an individual across the banking industry.

    READ MORE: State Bank launches environment, social risk management manual

    The SBP advised the banks to conduct proper due diligence of the individual customers at the time of their onboarding/ update of risk profiles and duly incorporate their cross-border payment needs through cards in their profiles.

    Banks are also directed to ensure that issuance of multiple cards to a single customer are commensurate with their risk profile and are monitored collectively. Further, banks should only allow those card based cross-border transactions, which are in-sync with the personal needs of the customers and have no commercial purpose.

    READ MORE: SBP limits cash up to USD 5,000 taking out of Pakistan

    Although, it is the primary responsibility of a customer to ensure that his/ her annual limit is not breached at any time, ADs shall institute a mechanism of ongoing monitoring whereby card based cross-border payments by individuals through single/multiple cards are only allowed in accordance with the limit prescribed above and as per the risk profile of the customer.

    Besides, ADs are advised to run an awareness campaign to inform their customers about the contents of this circular and the fact that cross-border commercial payments through cards issued to individuals are not permissible.

    READ MORE: SBP, FIA jointly take action against illegal exchange companies

    ADs are advised to ensure meticulous compliance of these instructions and bring the same to the notice of all their constituents. Any non-compliance of above instructions may be dealt with under relevant provisions of the Foreign Exchange Regulation Act, 1947 and any pecuniary or administrative action, as deemed necessary, may be initiated against the delinquent ADs.

  • Rupee makes recovery as limit imposed on dollar cash movement

    Rupee makes recovery as limit imposed on dollar cash movement

    KARACHI: Pakistani Rupee (PKR) made recovery against the US dollar on Monday as the government imposed limit on taking cash dollar out of Pakistan.

    The exchange rate recorded a gain of 23 paisas in rupee value to end at PKR 221.42 from last closing of PKR 221.65 on November 08, 2022 in interbank foreign exchange market.

    READ MORE: PKR ends stable against US dollar in interbank

    The foreign currency market was remained closed on November 09, 2022 due to public holiday that was announced by the government on occasion of Iqbal Day.

    Currency experts said that the latest measures of the government to limit the cash dollar taking out of Pakistan supported the local currency to make gain.

    On November 08, 2022, the SBP issued a circular to restrict the amount of foreign currency in cash up to equivalent to USD 5,000 from USD 10,000.

    READ MORE: SBP limits cash up to USD 5,000 taking out of Pakistan

    The central bank issued a circular stating that it had reviewed the existing foreign currency cash carrying limits for travel purposes, and decided to further rationalize the same.

    As per the revised limits individuals with age 18 years and above (adults) can now take out of Pakistan foreign currency (FCY) equivalent to USD5,000 per visit, while those below the age of 18 years (minors) can carry out foreign currency equivalent to USD2,500 per visit. Further, the annual ceiling to take out FCY for adults and minors shall be USD30,000 and USD15,000, respectively.

    READ MORE: US Dollar falls by 26 paisas to PKR 221.66 in interbank market

    The experts said that the lower level of foreign exchange reserves of the country was remained a challenge for rupee stability in coming days.

    Recently, Pakistan foreign exchange reserves increased by $1.527 billion to $14.69 billion by week ended October 28, 2022 after transfer of funds from Asian Development Bank (ADB).

    READ MORE: Rupee inches up against dollar to end PKR 221.92

    The country’s foreign exchange reserves increased to $14.689 billion by week ended October 28, 2022 as compared with $13.162 billion a week ago i.e. October 21, 2022.

    The country’s foreign exchange reserves hit all-time high of $27.228 billion on August 27, 2021. Since then the foreign exchange reserves have declined by $12.539 billion.

    The official foreign exchange reserves of the State Bank also increased by $1.473 billion to $8.913 billion by week ended October 28, 2022 when compared with $7.44 billion a week ago.

    READ MORE: Dollar extends gain to reach PKR 221.95 in interbank

  • State Bank, NBP to withdraw petitions in Riba case: Ishaq Dar

    State Bank, NBP to withdraw petitions in Riba case: Ishaq Dar

    ISLAMABAD: Finance Minister Senator Muhammed Ishaq Dar Wednesday said that State Bank of Pakistan (SBP) and National Bank of Pakistan (NBP) will withdraw their petitions from the Supreme Court of Pakistan against the judgment of Federal Shariat Court in which the Court had ordered implementation of interest-free (Riba free) banking system in the country.

    READ MORE: KCCI demands implementation of Riba free banking

    He said that in this regard he held several meetings and detailed discussions with the SBP Governor and under the special directives of Prime Minister, it was decided that both the SBP and NBP would withdraw their petitions against the decision.

    He said that the government would also expedite its efforts to introduce Shariah compliant banking system in the country for rapid growth and promotion of Islamic bank and finance.

    READ MORE: SBP seeks Supreme Court guidance on Riba case judgement

    He further informed that during 2013-2018 several steps were being taken to promote Islamic economic system and a special committee comprising on Islamic scholars were also formed, adding that Islamic Banking system also observed significant growth and progress at that time.

    READ MORE: IPS demands implementation of court judgment on Riba

    However, he said that from last few years the sector was completely neglected and no further progress was witnessed, adding that promotion of Islamic economic system and interest free banking was the top priority of incumbent government

    He said that government was also determined to overcome all the challenges faced for introducing interest free banking system and it will take all possible measures to take forward the interest free banking and economy for the prosperity of nation.

    READ MORE: Court judgment: Riba is Haram in any form