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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.

  • Riba case adjourned to April 04

    Riba case adjourned to April 04

    KARACHI: The full bench of Federal Shariat Court continued hearing of Riba case in the bench registry at Karachi on March 25 and 26, 2022.

    The full bench comprises of Chief Justice Muhammad Noor Meskanzai, Honourable Justice Dr. Syed Muhammad Anwer and Honourable Justice Khadim Hussain M. Shakih.

    READ MORE: Court hearing on Riba-free banking in Pakistan

    Ahmed Ali from Meezan Bank appeared before the Court and gave a detailed presentation on Islamic banking system and replacement of conventional banking with the Islamic Banking System.

    Maulana Isamtullah as amicus curiae advanced his arguments on banking interest.

    READ MORE: PMRC, HBL Islamic Banking raise Rs1bn Sukuk

    Mufti Ihsan Waqar, Chairman, Shariah Advisory Board of National Bank of Pakistan filed his written submissions about Riba and Islamic Banking system. Learned Additional Advocate General, Sindh appeared before the court and submitted his opinion on Riba.

    The matter was subsequently adjourned and will now be heard on 4th April 2022 at the principal seat of the Federal Shariat Court at Islamabad.

    READ MORE: SBP issues five-year strategic plan for growth of Islamic banking

    The State Bank of Pakistan (SBP) defines Riba as:

    The word “Riba” means excess, increase or addition, which correctly interpreted according to Shariah terminology, implies any excess compensation without due consideration (consideration does not include time value of money). This definition of Riba is derived from the Quran and is unanimously accepted by all Islamic scholars.

    The meaning of Riba has been clarified in the following verses of Quran (Surah Al Baqarah 2:278-9)

    READ MORE: SBP launches report on SDGs from banking perspective

    “O those who believe; fear Allah and give up what still remains of the Riba if you are believers. But if you do not do so, then be warned of war from Allah and His Messenger. If you repent even now, you have the right of the return of your principal; neither will you do wrong nor will you be wronged.”

    “The origination of term interest dates back to 17th century with the emergence of banking system at global level. Interest means giving and/or taking of any excess amount in exchange of a loan or on debt. Hence, it carries the same meaning/value as that of Riba as defined in the previous question. Further, it is narrated that “the loan that draws interest is Riba”.

    There is consensus among the Muslim scholars of all the fiqhs that interest is Riba in all its forms and manifestations.

  • Bank holiday declared for Zakat deduction

    Bank holiday declared for Zakat deduction

    KARACHI: The State Bank of Pakistan (SBP) on Monday declared bank holiday on Monday April 04, 2022 for deduction of Zakat.

    In a statement, the central bank said it will remain closed for public dealing on Monday, April 4, 2022, which shall be observed as “Bank Holiday” for the purpose of deduction of Zakat.

    READ MORE: Banks to observe extended hours for tax collection

    All banks / development financial institutions (DFIs) / Microfinance Banks (MFBs) shall, therefore, remain closed for public dealing on the afore-mentioned date.

    However, all employees of the banks / DFIs / MFBs will attend the office on Bank Holiday treating it as a normal working day (except for public dealing).

    READ MORE: SBP takes regulatory action against exchange company

  • Dollar jumps to new record high at PKR 182.19

    Dollar jumps to new record high at PKR 182.19

    KARACHI: The US dollar jumped to make new record high against the Pak Rupee (PKR) at Rs182.19 in the interbank foreign exchange market on Monday.

    The rupee declined by 41 paisas to close at Rs182.19 against the dollar from last Friday’s closing of Rs181.78 in the interbank foreign exchange market. The previous closing was already the record low of the local currency.

    READ MORE: Dollar continues historic journey; tops at PKR 181.78

    Currency experts said that the dollar demand remained high during the day as market was opened after two weekly holidays. Further, falling foreign exchange reserves, volatiles commodity prices in international markets and political uncertainty further depressed the rupee value.

    READ MORE: Dollar maintains record high against PKR at Rs181.73

    Large external payments against foreign debts depressed the rupee value. Pakistan’s foreign exchange reserves fell by $2.28 billion to $21.44 billion by March 18, 2022 as compared with $23.72 billion as of February 4, 2022. The foreign exchange reserves of the country hit record high at $27.23 billion on August 27, 2021.

    READ MORE: Rupee’s losing streak continues as dollar tops Rs181.73

    The ballooning current account deficit escalated the dollar value. Pakistan’s current account deficit ballooned to $12 billion during first eight months (July – February) 2021/2022 against a surplus of $994 million in the corresponding months of the last fiscal year. Although the current account deficit narrowed to $545 million in February 2022 as compared with the deficit of $2.53 billion in January 2022, scheduled external repayments are still a threat to balance of payment.

    READ MORE: Rupee collapses to dollar at record low Rs181.25

  • Dollar hits PKR 182.15 in midday trading

    Dollar hits PKR 182.15 in midday trading

    KARACHI: The US dollar touched a new peak against Pakistan Rupee (PKR) at Rs182.15 at midday trading in interbank foreign exchange market.

    The rupee was ended Rs181.78 against the dollar at closing on March 25, 2022. It was previous record high of the dollar against the rupee.

    READ MORE: Dollar continues historic journey; tops at PKR 181.78

    Currency experts said that the rupee was under immense pressure due to external payments, political unrest and Russia-Ukraine war.

    READ MORE: Dollar maintains record high against PKR at Rs181.73

    The massive outflow of foreign exchange for repayment of external debt kept pressure on the exchange rate.

    READ MORE: Dollar maintains record high against PKR at Rs181.73

    Pakistan’s foreign exchange reserves fell by $2.28 billion to $21.44 billion by March 18, 2022 as compared with $23.72 billion as of February 4, 2022. The foreign exchange reserves of the country hit record high at $27.23 billion on August 27, 2021.

    READ MORE: Rupee’s losing streak continues as dollar tops Rs181.73

    The rupee was under pressure due to political uncertainty, external payment demand and volatile international oil prices. A no-confidence motion moved against the prime minister by the opposition parties had resulted in negative sentiments in the market.

    The dollar demand was also rising due to import of commodities related to the holy month of Ramzan. The local forex market is also uncertain due to volatile oil prices in the international markets. The oil prices have seen continuous fluctuation since the Russia-Ukraine war began on February 24, 2022.

    Dollar continues historic journey; tops at PKR 181.78
  • SBP takes regulatory action against exchange company

    SBP takes regulatory action against exchange company

    KARACHI: The State Bank of Pakistan (SBP) has taken regulatory actions against an exchange company and suspended its operations, according to a statement issued on Friday.

    The central bank suspended with immediate effect the authorization of an Exchange Company namely M/s. Noble Exchange International (Pvt) Limited till further orders for violation of SBP rules and regulations, according to a statement issued on Friday.

    The Exchange Company, its head office, branches, franchises have been debarred from undertaking any kind of business activity during the suspension period.

    READ MORE: Banks to observe extended hours for tax collection

  • Banks to observe extended hours for tax collection

    Banks to observe extended hours for tax collection

    The State Bank of Pakistan (SBP) has directed banks to observe extended working hours on the last two days of March 2022. This decision aims to streamline the tax payment process and provide convenience to individuals and businesses fulfilling their financial obligations.

    (more…)
  • Dollar continues historic journey; tops at PKR 181.78

    Dollar continues historic journey; tops at PKR 181.78

    KARACHI: The US dollar continued its historic journey against the Pakistan Rupee (PKR) on Friday to reach new high of Rs181.78 at closing of interbank foreign exchange market.

    The rupee witnessed five paisas decline to the dollar from previous day’s closing of Rs181.73, which was previous historic low of the local unit at interbank closing of March 22, 2022.

    READ MORE: Dollar maintains record high against PKR at Rs181.73

    The dollar took breath yesterday to maintain the historic low as exchange ended unchanged at Rs181.73. Prior to this, the local currency fell continuously against the greenback for seven consecutive trading sessions till March 22, 2022.

    The massive outflow of foreign exchange for repayment of external debt kept pressure on the exchange rate.

    READ MORE: Rupee’s losing streak continues as dollar tops Rs181.73

    Pakistan’s foreign exchange reserves fell by $2.28 billion to $21.44 billion by March 18, 2022 as compared with $23.72 billion as of February 4, 2022. The foreign exchange reserves of the country hit record high at $27.23 billion on August 27, 2021.

    READ MORE: Rupee collapses to dollar at record low Rs181.25

    The rupee was under pressure due to political uncertainty, external payment demand and volatile international oil prices. A no-confidence motion moved against the prime minister by the opposition parties had resulted in negative sentiments in the market.

    The dollar demand was also rising due to import of commodities related to the holy month of Ramzan. The local forex market is also uncertain due to volatile oil prices in the international markets. The oil prices have seen continuous fluctuation since the Russia-Ukraine war began on February 24, 2022.

    READ MORE: Dollar continues to make historic high; hits Rs180.57

  • SBP launches report on SDGs from banking perspective

    SBP launches report on SDGs from banking perspective

    KARACHI: Dr. Reza Baqir, Governor State Bank of Pakistan (SBP) has unveiled a report titled ‘SDGs and sustainability report – Pakistan banking sector perspective’ in Dubai on March 23, 2022, the central bank said on Friday.

    The report was launched in an event on the theme ‘The Future of Green and Sustainable Finance – The Role of the Sustainable Development Goals (SDGs) organized by the Global Ethical Finance Initiative (GEFI) in collaboration with the Government of Scotland and United Kingdom Islamic Finance Council (UKIFC).

    READ MORE: Banks approve housing loans worth Rs7.4 billion in event

    This is the first ever report from the banking perspective that not only maps progress on Sustainable Development Goals (SDGs) 2030, set by the United Nations, by banks but also highlights specific gaps in achieving them. Other speakers included Ivan McKee, Minister for Trade, Scotland and the event was attended by policy makers, senior bank executives, financial advisors, diplomats and academics who shared insights on the SDGs. 

    In his keynote address, Dr. Reza Baqir highlighted SBPs and Government of Pakistan’s commitment to the SDGs, demonstrated by initiatives to achieve these goals and work to ensure sustainability. He emphasized that Pakistan is one of the first few countries to adopt SDGs 2030 agenda through a unanimous resolution of Parliament. He highlighted that the seven pillars of Vision-2025 of Government of Pakistan are fully aligned with the SDGs and provide a comprehensive long-term strategy for achieving inclusive growth and sustainable development.

    READ MORE: Financing for Mera Pakistan Mera Ghar gains momentum

    In pursuit of SDGs, Dr. Reza highlighted some of the key initiatives undertaken by State Bank of Pakistan in the recent times including a landmark policy entitled ‘Banking on Equality’ to address gender gap in financial inclusion and flagship Mera Pakistan Mera Ghar (MPMG) scheme to provide financing for low cost and affordable housing in the country, which was nonexistent prior to 2021.

    He stated that MPMG has helped to provide shelter to those who are underprivileged but also stimulated the economy. The flagship scheme has so for attracted applications amounting to Rs357 billion out of which housing loans of Rs157 billion has been approved with disbursement of Rs56 billion.

    The Governor specially mentioned SBP’s innovative renewable energy financing facility, which encourages banks to increase green financing portfolio and reduce carbon footprint.

    READ MORE: Court hearing on Riba-free banking in Pakistan

    Dr. Reza Baqir lauded the work done so far by Pakistani banks on SDGs. However he stressed that Banks Boards and management should explicitly convey their commitment and support for implementation of SDGs to their teams and other stakeholders to embed this message.

    He also said that banks should develop implementations plans with identification of time lines and responsibilities to achieve SDGs in conjunction with capacity building programs.

    In conclusion, Dr. Baqir emphasized on the need to institutionalize and deepen the reforms to advance the implementation of SDGs to making our planet a better place to live for the generations to come.

    The Governor SBP also participated in the fireside chat during the event with Ivan McKee, Minister for Trade, Scotland. During discussion, Dr. Reza Baqir brought attention to the important role of private sector finance in the funding of the SDGs commitments.

    READ MORE: Pakistan’s CAD mounts to $12 billion in eight months

    He said that space for private sector investments is huge, and in this regard the Government is providing the required facilitation and regulatory flexibility.  He also emphasized that emerging market countries also need innovative financial structures from International Financial Institutions and multilaterals to meet the enormous financial needs to meet sustainability requirements.

  • Meezan Bank provides bill discounting facility for Huawei

    Meezan Bank provides bill discounting facility for Huawei

    KARACHI: Meezan Bank has successfully instituted an Islamic alternate to Inland Bill Discounting Facility for Huawei Technologies Pakistan (Pvt.) Limited – a first-of-its-kind transaction in Islamic banking industry, developed as a Shariah-compliant alternate to local bill discounting facility.

    READ MORE: Meezan Bank lends Rs1 billion under youth scheme

    The first drawdown under the facility was made against a deferred payment inland Letter of Credit (LC) opened by Pak Telecom Mobile Limited (Ufone) in favour of Huawei. The transaction has been developed by the Bank under the supervision and guidance of Dr. Muhammad Imran Ashraf Usmani – Vice Chairman Shariah Board, Meezan Bank, after a series of deliberations and persistent efforts.

    READ MORE: Meezan Bank announces 26% growth in annual profit

    On this occasion, Abdullah Ahmed – Group Head, Corporate & Institutional Banking, Meezan Bank stated: “Meezan Bank is pleased to offer yet another milestone solution for the Islamic banking industry i.e., a Shariah-compliant alternative to discounting of long tenor inland bills with provision of variable profit rates. We are hopeful that this solution will serve as a precedent for unique transactions pertaining to trade within telecom industry.”

    READ MORE: Meezan Bank, Suzuki Motors sign MoU for car financing

    Ahmed Ali Siddiqui – Group Head, Shariah Compliance, Meezan Bank, stated, “This endeavour of Meezan Bank displays its capability to develop out-of-the-box, innovative and Shariah-compliant solutions and reinforces its position as the leading Islamic bank of the country. We hope this solution will open a new chapter in facilitating trade among businesses and industries in a Shariah-compliant way and bring more businesses and trade into fold of Islamic banking.”

    READ MORE: Meezan Bank starts Islamic financing scheme for SMEs

  • Dollar maintains record high against PKR at Rs181.73

    Dollar maintains record high against PKR at Rs181.73

    KARACHI: The US dollar maintained the record high level of Rs181.73 on Thursday as Pakistan Rupee (PKR) ended unchanged in interbank foreign exchange market.

    The greenback hit the record high level of Rs181.73 on March 22, 2022. The rupee ended at this level despite import pressure owing to the market opened after a day of holiday.

    READ MORE: Rupee’s losing streak continues as dollar tops Rs181.73

    Currency experts said that high import payments and widening of current account deficit kept the pressure on rupee value. Besides, the political uncertainty also added the pressure on exchange rate.

    Furthermore, the dollar demand was also rising due to import of commodities related to the holy month of Ramzan. The local forex market is also uncertain due to volatile oil prices in the international markets.

    READ MORE: Rupee collapses to dollar at record low Rs181.25

    Further, the external payments, foreign exchange reserves declined and it pushed the rupee to fall sharply.

    The foreign exchange reserves of the country fell by $386 million to $22.283 billion by the week ended March 11, 2022 as against $22.669 billion a week ago. The official reserves of the State Bank fell by $381 million to $15.831 billion by the week ended March 11, 2022 as compared with $16.212 billion a week ago.

    READ MORE: Dollar continues to make historic high; hits Rs180.57

    The country spent $11.69 billion for the import of petroleum products during the first seven months (July – February) 2021/2022 as compared with $5.64 billion in the corresponding period of the last fiscal year, showing an increase of 107 per cent.

    READ MORE: Dollar climbs new peak PKR 180.07 at interbank closing