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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.

SBP allows pact of banks, exchange companies for remittances

KARACHI: The State Bank of Pakistan (SBP) on Thursday allowed exchange companies to enter into agreements with Authorized Dealers (ADs)/banks for disbursement of home remittances.

The central bank invited attention of Exchange Companies (ECs) to instructions contained in Para 9 (ii), Chapter 3 of Exchange Companies Manual regarding the business of inward home remittances.

READ MORE: Pakistan makes currency declaration must at air ticket booking

The SBP said in order to facilitate the disbursement of home remittances, Exchange Companies (ECs) are henceforth allowed to enter into agreements with the Authorized Dealers (ADs) to act as their sub-agents for disbursement of home remittances in PKR to beneficiaries, received by ADs through their international tie-ups.

As home remittance disbursement sub-agent of ADs, ECs are advised to ensure the following:

READ MORE: Pakistani Rupee eases against dollar; Interbank ends at Rs214.88

No home remittances related incentive, as provided by the Government of Pakistan, shall be claimed by the ECs for the transactions disbursed as sub-agent of an AD. ECs shall also not recover any funds from remittance recipients. However, ADs can share with ECs any part of incentive for home remittances, as provided to ADs by the government.

All such transactions shall be recorded by the ECs in their Core Business Application on real time basis; however, ECs are not required to report such disbursements to SBP under ITRS, as ADs are reporting such transactions to State Bank under ITRS.

READ MORE: National Bank announces 28% fall in net profit for 1HCY22

The amount disbursed under such agreement shall not be accounted for the calculation of outward remittance limit, as prescribed in Para 9(iii) (c) ibid.

The SBP said failure to comply with the above instructions shall attract enforcement action against the concerned Exchange Company under the relevant provisions of the Foreign Exchange Regulation Act, 1947.

READ MORE: MCB Bank registers 71% decline in profit for 2QCY22

August 19, 2022
Pakistan makes currency declaration must at air ticket booking

KARACHI: Pakistan has made it must for all international air passengers to declare foreign currency at the time of ticket booking.

The country has taken the decision to comply with the conditions of Financial Action Task Force (FATF) for preventing money laundering and terror financing.

READ MORE: Pakistan launches online currency declaration

Sources in Civil Aviation Authority of Pakistan (CAA) told PkRevenue.com on Thursday that all the passengers intending to go abroad are required to declare currency at the time of booking the international air ticket.

For outbound flights, airlines may also direct their staff/travel agents to ensure that they provide a copy of the declaration at the time of booking of ticket.

READ MORE: FPCCI suggests amnesty for cryptocurrency declaration

“At check-in counters, airlines are directed to issue boarding pass only once the passengers have deposited the declaration with them,” according to a statement issued by the CAA.

It further said that Pakistan Customs are required to deploy their staff along with airline staff to supervise/assist the passengers at the dedicated facilitation counter inside the check-in hall.

The airline staff will collect the declarations and hand over the same to the customs staff after the closure of the flight along with the passenger’s manifest.

READ MORE: FPCCI demands reducing income tax slabs to five

For Inbound Flights, airlines are required to ensure in-flight announcement by the flight crew for every inbound flight for submission of subject declaration wherein the passengers will mention the currency under the regulatory requirements of FATF.

The airline crew will distribute the declaration during the flight to all the passengers, irrespective of their nationality. The said declaration will be deposited at the customs counter before the immigration desks at International Arrival.

CAA will provide space and counters for the collection of all declaration forms.

READ MORE: FBR tightens monitoring to prevent currency smuggling

August 18, 2022
Pakistani Rupee eases against dollar; Interbank ends at Rs214.88

KARACHI: Pakistan Rupee eased for second straight day against US dollar on Thursday owing to rising demand for import and corporate payments.

The exchange rate ended recorded a decline of seven paisas to end at Rs21.88 to the dollar from previous day’s closing of Rs214.95 in the interbank foreign exchange market.

READ MORE: Dollar ends losing streak against Pakistani Rupee; closes at Rs214.88

A day earlier, the dollar appreciated for first time since the rupee hit record low of Rs239.94 on July 28, 2022.

The local units gained about Rs25.04 or 10.85 per cent during past 11 trading days. The rupee is continuously making recovery against the green back since making a historic low of Rs239.94 to the dollar on July 28, 2022.

It is important to note that the rupee witnessed recent decline despite the fact that IMF had announced date for executive board meeting to review Pakistan tranche.

READ MORE: Dollar slides for 11th day against Pakistani rupee on August 16, 2022

Further, there are reports of renewal of Saudi financial assistance helped to improve sentiments in the currency market. Further decline in international oil prices also helped the rupee to make gain.

Besides, they said that the tight monitoring of the State Bank of Pakistan (SBP) had eased the pressure on exchange rate.

It is worth mentioning that the foreign exchange reserves of the country depleted massively.

Pakistan’s foreign exchange reserves have declined 43-month low at $13.56 billion by week ended August 05, 2022. The foreign exchange reserves of country fell by $648 million as those were $14.21 billion a week ago i.e. July 29, 2022.

Pakistan’s foreign exchange reserves were seen at $13.597 billion on January 2019. 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 $13.668 billion.

READ MORE: Dollar falls for ten straight days against Pakistani Rupee; ends at Rs213.98

However, the recent recovery in rupee value may be attributed to the efforts of the central bank.

The State Bank of Pakistan (SBP) initiated inspection against the exchange companies on August 01, 2022. On August 2, 2022, the SBP suspended the operations of four branches of two ECs (Galaxy Exchange Co and Al-Hameed International Money Exchange Co) for violation of SBP regulations.

The central bank also imposed monetary penalties on some ECs in the recent past. Besides, due to violations of SBP instructions, arrangements of 13 franchises have been terminated by six different ECs in the recent past.

The dealers said that after assurance from the International Monetary Fund (IMF) that Pakistan had met all the requirement for the disbursement of $1.2 billion tranche under Extended Fund Facility (EFF).

The currency experts said that the rupee was also supported by reduction in trade deficit during the first month of the current fiscal year.

READ MORE: Dollar plummets to Rs215.49 against Pakistani Rupee on August 12, 2022

The trade deficit narrowed by 18.33 per cent to $2.62 billion for the month of July 2022 as compared with the deficit of $3.23 billion in the same month of the last year.

The trade deficit was mainly contracted due to 12.8 per cent decline in import bill during the month under review. The import bill of the country was reduced to $4.86 billion in July 2022 as compared with $5.57 billion in the same month of the last year.

August 18, 2022
National Bank announces 28% fall in net profit for 1HCY22

KARACHI: National Bank of Pakistan (NBP) on Wednesday announced a sharp decline of 28 per cent in net profit for half year ended June 30, 2022.

According to financial results submitted to Pakistan Stock Exchange (PSX), the bank announced Rs12.24 billion as profit after tax during the first half (January – June) of calendar year 2022 as compared with Rs17.05 billion in the same half of the last year.

The bank announced earnings per share (EPS) at Rs5.74 for the half year under review as compared with EPS Rs7.98 in the same half of the last year.

READ MORE: Engro Corp declares increase in half year profit to Rs16.6 billion

The massive decline in net profitability may be attributed to significant increase in payment of tax. NBP paid an amount of Rs21.87 billion for the half year ended June 30, 2022 as compared with Rs11.13 billion in the same half of the last year, showing about 97 per cent growth.

The bank recorded an amount of Rs34.12 profit before tax (PBT) during the first half of CY 2022 as compared with Rs28.17 billion in the same half of the last year, showing a growth of 21.12 per cent.

The profit after tax of the bank for the second quarter of calendar year 2022 ended June 30, 2022 recorded at Rs2.5 billion, depicting a decrease of 73 per cent Year on Year (YoY).

Higher taxes dragged the profitability in the second quarter.

READ MORE: Allied Bank’s tax payment grows 121% in 1HCY22

Net Interest Income of the bank settled at Rs27 billion during 2QCY22, increasing 6 per cent YoY and Quarter on Quarter (QoQ), both. With this, the total Net Interest Income (NII) for the half year ended June 30, 2022 went up to Rs53 billion, marking a 12 per cent YoY jump. Interest expense registered a significant increase of 116 per cent YoY while interest income was up 68 per cent YoY on the back of policy rate hikes, in the out-going quarter.

Non-Interest income too was up during the quarter, 7 per cent YoY | 24 per cent QoQ, taking 1HCY22’s total to Rs19.5 billion.

READ MORE: MCB Bank registers 71% decline in profit for 2QCY22

Foreign exchange , Fee and Dividend incomes fueled the Net Fee Income (NFI), posting an increase of 33 per cent, 9 per cent and 37 per cent on YoY basis, respectively.

In addition, the bank recorded Rs145 million in share of profit from joint venture, marking a 110 per cent YoY increase.

During 2QCY22, provisioning significantly declined 85 per cent YoY | 59 per cent QoQ. This takes the overall provisioning of the bank to Rs2 billion in 1HCY22, -71 per cent YoY.

READ MORE: Attock Petroleum declares massive 277% growth in annual profit

The bank’s operating expenses increased 16 per cent YoY in 2QCY22 clocking-in at Rs19.4 billion (1HCY22: Rs36.5 billion, 16 per cent YoY). With this, Cost/Income stood at 50.92 per cent in 2QCY22 against 46.38 per cent same period last year.

Effective tax rate was significantly up during 2QCY22 at 86.05 per cent compared to 39.26 per cent last quarter. This higher taxation was on account of revised taxes including corporate and super tax.

READ MORE: Meezan Bank posts 36% growth in half year profit

August 18, 2022
Dollar ends losing streak against Pakistani Rupee; closes at Rs214.88

KARACHI: The US dollar on Wednesday ended 11-day losing streak against Pakistani Rupee (PKR) to close at Rs214.88 in interbank foreign exchange market.

The exchange rate witnessed a decline of 98 paisas in rupee value to close at Rs214.88 to the dollar from previous day’s closing of Rs231.90 in interbank foreign exchange market.

READ MORE: Dollar slides for 11th day against Pakistani rupee on August 16, 2022

This is the first gain in dollar value since the rupee hit record low of Rs239.94 on July 28, 2022.

The local units gained about Rs25.04 or 10.85 per cent during past 11 trading days. The rupee is continuously making recovery against the green back since making a historic low of Rs239.94 to the dollar on July 28, 2022.

Currency experts said that reports of renewal of Saudi financial assistance helped to improve sentiments in the currency market. Further decline in international oil prices also helped the rupee to make gain.

Further, Pakistani authorities are confident about release of $1.2 billion tranche by the International Monetary Fund (IMF) in next few days.

READ MORE: Dollar falls for ten straight days against Pakistani Rupee; ends at Rs213.98

Besides, they said that the tight monitoring of the State Bank of Pakistan (SBP) had eased the pressure on exchange rate.

It is worth mentioning that the foreign exchange reserves of the country depleted massively.

Pakistan’s foreign exchange reserves have declined 43-month low at $13.56 billion by week ended August 05, 2022. The foreign exchange reserves of country fell by $648 million as those were $14.21 billion a week ago i.e. July 29, 2022.

Pakistan’s foreign exchange reserves were seen at $13.597 billion on January 2019. 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 $13.668 billion.

However, the recent recovery in rupee value may be attributed to the efforts of the central bank.

READ MORE: Dollar plummets to Rs215.49 against Pakistani Rupee on August 12, 2022

The State Bank of Pakistan (SBP) initiated inspection against the exchange companies on August 01, 2022. On August 2, 2022, the SBP suspended the operations of four branches of two ECs (Galaxy Exchange Co and Al-Hameed International Money Exchange Co) for violation of SBP regulations.

The central bank also imposed monetary penalties on some ECs in the recent past. Besides, due to violations of SBP instructions, arrangements of 13 franchises have been terminated by six different ECs in the recent past.

The dealers said that after assurance from the International Monetary Fund (IMF) that Pakistan had met all the requirement for the disbursement of $1.2 billion tranche under Extended Fund Facility (EFF).

The currency experts said that the rupee was also supported by reduction in trade deficit during the first month of the current fiscal year.

READ MORE: Dollar continues to fall against PKR; ends at Rs218.88

The trade deficit narrowed by 18.33 per cent to $2.62 billion for the month of July 2022 as compared with the deficit of $3.23 billion in the same month of the last year.

The trade deficit was mainly contracted due to 12.8 per cent decline in import bill during the month under review. The import bill of the country was reduced to $4.86 billion in July 2022 as compared with $5.57 billion in the same month of the last year.

August 17, 2022
Allied Bank’s tax payment grows 121% in 1HCY22

KARACHI: Allied Bank on Wednesday announced fall in profit by 23 per cent for half year ended June 30, 2022 mainly surge in tax payment by 121 per cent.

According to financial results submitted to Pakistan Stock Exchange (PSX), Allied Bank declared profit after tax of Rs6.83 billion for the half year ended June 30, 2022 as compared with Rs8.88 billion in the same half of the last fiscal year.

READ MORE: MCB Bank registers 71% decline in profit for 2QCY22

The bank paid an amount of Rs13.28 billion as taxes for the period January – June 2022 as compared with Rs6.01 billion in the same period of the last year.

Earnings per share (EPS) of the bank fell to Rs5.96 as compared with EPS of Rs7.75 in the same half year of the last year.

The board of directors of the bank in their meeting on August 17, 2022 approved an interim cash dividend for the quarter ended June 30, 2022 at Rs2 per share i.e. 20 per cent. This is in addition to interim Dividend already paid at Rs2 per share i.e. 20 per cent.

READ MORE: Attock Petroleum declares massive 277% growth in annual profit

The bank declared total income of Rs38.25 billion for the half year ended June 30, 2022 as compared with Rs31 billion in the same half of the last year.

Net mark-up / interest income increased to Rs27.51 billion for the period January – June 2022 as compared with Rs23 billion in the same half of the last year.

On the other hand, the total non-mark up / interest income rose to Rs10.74 billion during the half year under review as compared with Rs7.93 billion in the same half of the last year.

READ MORE: Meezan Bank posts 36% growth in half year profit

The bank earned Rs4.29 billion as foreign exchange income during the half year ended June 30, 2022 as compared with Rs662 million in the same half of the last year.

Operating expenses of the bank increased to Rs18.27 billion during January – June 2022 as compared with Rs16.16 billion in the same period of the last year.

The bank declared sharp increase in profit before tax to Rs19.37 billion for the half year ended June 30, 2022 as compared with Rs14.4 billion in the same period of the last year.

READ MORE: Philip Morris Pakistan declares 11% fall in half year profit

August 17, 2022
MCB Bank registers 71% decline in profit for 2QCY22

KARACHI: MCB Bank on Wednesday announced sharp decline of 71 per cent in profit for the second quarter ended June 30, 2022.

According to financial results submitted to Pakistan Stock Exchange (PSX), the bank announced profit after tax of Rs2.29 billion for the quarter ended June 30, 2022 as compared with Rs7.87 billion in the same quarter of last year.

READ MORE: Attock Petroleum declares massive 277% growth in annual profit

MCB Bank declared earnings per share (EPS) at Rs1.93 for the quarter under review as compared with EPS of Rs6.64 in the same quarter last year.

Analysts at KASB Research said that the result is below estimates of Rs2.2 per share. The deviation is mainly on account of higher than expected admin expense that increased by 19 per cent Year on Year (YoY)/ 10 per cent Quarter on Quarter (QoQ).

READ MORE: Meezan Bank posts 36% growth in half year profit

The result was accompanied with an interim cash dividend of Rs4.0 per share. This has taken the first half year ended June 30, 2022 payout to Rs9.0/share. Last year, the payout came in at Rs9.5/share.

MCB posted strong Net Interest Income (NII) of Rs22.9 billion in second quarter with the reversal of interest rate. Net Fee Income (NFI) rose by 42 per cent YoY in the second quarter of 2022 where major support came from fee and foreign exchange income increasing by 29 per cent YoY and 3.6x YoY, respectively.

READ MORE: Philip Morris Pakistan declares 11% fall in half year profit

The bank recorded a provisioning expense of Rs71 million in the second quarter. The analysts think this is because of superior asset quality.

Profit Before Tax (PBT) rose by 30 per cent YoY, however, Profit After Tax (PAT) saw a decline of 71 per cent YoY/ 75 per cent QoQ as the impact on 10 per cent super tax was recognized in the quarter under review.

Consequently, ETR came in at 87 per cent. This along with higher than expected admin expense contained the profits.

READ MORE: Lucky Cement posts record Rs36.42 billion profit

August 17, 2022
Dollar slides for 11th day against Pakistani rupee on August 16, 2022

KARACHI: Pakistani rupee (PKR) continued to make gain against the dollar for 11 consecutive days on Tuesday as exchange rate ended at Rs213.90 in interbank foreign exchange market.

The exchange rate recorded a gain of eight paisas in rupee value to end at Rs213.90 to the dollar from previous day’s closing of Rs213.98 in the interbank foreign exchange market.

READ MORE: Dollar falls for ten straight days against Pakistani Rupee; ends at Rs213.98

The local units gained about Rs25.04 or 10.85 per cent during past 11 trading days. The rupee is continuously making recovery against the green back since making a historic low of Rs239.94 to the dollar on July 28, 2022.

Currency experts said that reports of renewal of Saudi financial assistance helped to improve sentiments in the currency market. Further decline in international oil prices also helped the rupee to make gain.

Further, Pakistani authorities are confident about release of $1.2 billion tranche by the International Monetary Fund (IMF) in next few days.

Besides, they said that the tight monitoring of the State Bank of Pakistan (SBP) had eased the pressure on exchange rate.

READ MORE: Dollar plummets to Rs215.49 against Pakistani Rupee on August 12, 2022

It is worth mentioning that the foreign exchange reserves of the country depleted massively.

Pakistan’s foreign exchange reserves have declined 43-month low at $13.56 billion by week ended August 05, 2022. The foreign exchange reserves of country fell by $648 million as those were $14.21 billion a week ago i.e. July 29, 2022.

Pakistan’s foreign exchange reserves were seen at $13.597 billion on January 2019. 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 $13.668 billion.

However, the recent recovery in rupee value may be attributed to the efforts of the central bank.

READ MORE: Dollar continues to fall against PKR; ends at Rs218.88

The State Bank of Pakistan (SBP) initiated inspection against the exchange companies on August 01, 2022. On August 2, 2022, the SBP suspended the operations of four branches of two ECs (Galaxy Exchange Co and Al-Hameed International Money Exchange Co) for violation of SBP regulations.

The central bank also imposed monetary penalties on some ECs in the recent past. Besides, due to violations of SBP instructions, arrangements of 13 franchises have been terminated by six different ECs in the recent past.

The dealers said that after assurance from the International Monetary Fund (IMF) that Pakistan had met all the requirement for the disbursement of $1.2 billion tranche under Extended Fund Facility (EFF).

The currency experts said that the rupee was also supported by reduction in trade deficit during the first month of the current fiscal year.

READ MORE: Rupee jumps to Rs221.91 against dollar

The trade deficit narrowed by 18.33 per cent to $2.62 billion for the month of July 2022 as compared with the deficit of $3.23 billion in the same month of the last year.

The trade deficit was mainly contracted due to 12.8 per cent decline in import bill during the month under review. The import bill of the country was reduced to $4.86 billion in July 2022 as compared with $5.57 billion in the same month of the last year.

August 16, 2022
SBP allows export of US dollar: ECAP

KARACHI: Exchange Companies Association of Pakistan (ECAP) on Tuesday said that the State Bank of Pakistan (SBP) has allowed export of dollar.

“Today [August 16, 2022] the SBP issued a circular to allow export of dollar,” said Malik Bostan, Chairman, ECAP in a statement.

READ MORE: Dollar falls for ten straight days against Pakistani Rupee; ends at Rs213.98

In a recent meeting with SBP governor, the ECAP apprised that the exchange companies had requested public to deposit their dollar in cash as the foreign currency hit Rs245 in the open market.

“We requested people to encash foreign currencies this will help in brining dollar value down to Rs185,” he added.

Malik Bostan said people responded to the appeal and sell millions of dollars at the counters of exchange companies, which helped the country to avoid default.

READ MORE: Dollar plummets to Rs215.49 against Pakistani Rupee on August 12, 2022

ECAP chief apprised the SBP governor that banks were not buying cash dollars from exchange companies. “Due to this exchange companies were exporting dollars with prior SBP permission,” he added.

He further added that this process takes five days for transferring the amount into exchange companies accounts. “This results in huge losses to exchange companies.”

Bostan urged the SBP to allow one time export of US dollars as it had been already allowed in case of Saudi Riyal, UAE Dirham, UK Pound and Euro.

READ MORE: Dollar continues to fall against PKR; ends at Rs218.88

“The exchange companies capital will not stuck in case permission is granted,” he added.

Once the SBP allows, the exchange companies will export dollars on daily basis and spread on buying and selling of dollar will also minimize.

“On this demand, the SBP issued a circular in this regard,” Bostan said and urged ECAP members to buy dollars from public at lower margin and export dollars.

READ MORE: Rupee jumps to Rs221.91 against dollar

August 16, 2022
Banks directed to allow RDA opening through mobile phones

KARACHI: The State Bank of Pakistan (SBP) on Monday directed banks to complete the development of Mobile Phone applications incorporating account opening facility for all types of Roshan Digital Accounts (RDAs).

The SBP in a statement said that a circular was issued on September 09, 2020 regarding the Service Standards for Roshan Digital Accounts for Non-Resident Pakistanis (NRPs) in terms of which RDA participating banks were advised to provide an exceptional and seamless digital experience to their customers via their web portals, mobile apps and other digital channels.

READ MORE: Faysal Bank celebrates 75th Pakistan Independence Day

In this regard, Banks are advised to complete the development of their Mobile Applications incorporating the following minimum features pertaining to the Roshan Digital Account (RDA) within 3 months from the date of issuance of this Circular Letter i.e. November 15, 2022:

Full-fledged account opening facility for all types of RDA accounts and customer segments that the bank is offering

Investment in NPCs (both conventional & Islamic)

Requests for Redemption/encashment of NPCs

READ MORE: Pakistan unveils first locally made electric car

Requests for repatriation of funds from RDA

Fund transfer services including interbank fund transfers via Raast and other platforms

Bill Payment services including utility and 1Bill payments

Online application/request and related processes for various RDA products including Roshan Apni Car and Roshan Apna Ghar showing updated status of the application

Online access to Roshan Samaaji Khidmat services

READ MORE: Pakistan issues Rs75 banknote to celebrate Independence Day

Option to Invest in Roshan Equity and Bank’s own products, if available and offered

Online option of currency conversion transaction, with live visibility of exchange rate

Online request for Cheque Books, debit cards, credit cards (if offered) etc.

Request for account statement, withholding tax certificate, account maintenance certificate, etc.

Instant confirmation of transactional activity

Complaint lodging and its resolution status

Live chat option and any other option that would facilitate RDA customers

READ MORE: Donald Blome visits Karachi to support US-Pakistan trade ties

In addition, option for investments in Mutual Funds, Insurance, Government Securities such as T-Bills, PIBs, etc. shall also be offered to customers, when available.

In case the banks are offering services that redirects the banks’ customers to a third-party interface, then the banks shall mandatorily conduct third-party security assessments of the mobile apps and the channels providing connectivity to these third-party interfaces.

Banks shall ensure compliance with all other relevant SBP’s instructions on mobile applications’ operations and security, etc. issued from time to time.

August 15, 2022