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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 announces timeline for implementing IFRS 9

    SBP announces timeline for implementing IFRS 9

    KARACHI: State Bank of Pakistan (SBP) on Tuesday announced timeline for implementing International Financial Reporting Standards 9 (IFRS 9). The central bank said that it has been decided to implement the IFRS 9 from January 01, 2022.

    The SBP said that through Circular No. 04 dated October 23, 2019 wherein the effective date of IFRS 9 implementation and its transition requirements were advised.

    However, keeping in view of COVID-19 impact and banking industry representations, it has been decided to implement the IFRS 9 from January 01, 2022 instead of its earlier implementation date of January 01, 2021.

    Meanwhile, the banks/DFIs/MFBs (hereinafter referred as Financial Institutions) are required to perform the following tasks:

    #ParticularsTimeline
    1 Submission of IFRS 9 compatible pro forma Financial Statements for
     year-ending 2020 and 2021 (as per the requirements given in para 2(a) and Annex-I of BPRD Circular No. 04 dated October 23, 2019)    		  Jul 15, 2021 Mar 31, 2022  
    2 Parallel Run Implementation of IFRS 9   Submission of Parallel Run Results for period ending Mar 31, 2021   Submission of Parallel Run Results for period ending Jun 30, 2021   Submission of Parallel Run Results for period ending Sep 30, 2021  Jul 30, 2021 Aug 31, 2021 Oct 31, 2021  

    The central bank said that it is aware of the fact that IFRS 9 implementation involves considerable judgment on part of the Financial Institutions (FIs) particularly on the Expected Credit Loss (ECL) Methodology.

    In this regard, the SBP, in line with best international practices, has developed “IFRS 9 application instructions” for ensuring smooth, robust and consistent implementation of IFRS 9 in the banking industry.

    The aim of these instructions is to achieve standardized practices with respect to the expected credit loss accounting and to draw out the SBP’s expectations from the FIs, where they are expected to exercise considerable judgment and/or elect to use simplifications and other practical expedients permitted under the Standard. Notwithstanding, the FIs are advised to develop their own Credit Conversion Factor and Loss Given Default models till Dec 31, 2021.

    The instructions enclosed herewith will be used by the FIs for their parallel reporting purposes only and these shall not be considered as final instructions, which will be issued by SBP subsequently based on the parallel run results.

    Further, for ECL to be recognized in 2022, SBP will provide timeline by Dec 2021 for absorption of ECL, for CAR purposes, after evaluation / assessment of individual FIs.

    During the parallel reporting period, FIs non-compliance will not attract punitive action; however, any non-compliance of specific provisions of these instructions will be disclosed by the FI in its pro forma financial statements and parallel run results along with reasons thereof.

  • KIBOR rates on July 06, 2021

    KIBOR rates on July 06, 2021

    KARACHI: State Bank of Pakistan (SBP) on Tuesday issued following Karachi Interbank Offered Rates (KIBOR) on July 06, 2021.

     TenorBIDOFFER
    1 – Week6.907.40
    2 – Week6.957.45
    1 – Month7.017.51
    3 – Month7.207.45
    6 – Month7.417.66
    9 – Month7.508.00
    1 – Year7.578.07
  • Rupee depreciates by 19 paisas against dollar

    Rupee depreciates by 19 paisas against dollar

    KARACHI: The Pak Rupee depreciated by 19 paisas against the dollar on Tuesday owing to higher demand for import payments, dealers said.

    The rupee ended at Rs158.37 to the dollar from the previous day’s closing of Rs158.18 in the interbank foreign exchange market.

    The dealers said that payment demand for import had witnessed an increase as economic activities had gained momentum.

    The dealers said that the rupee may rebound in the coming days owing to substantial inflows of export receipts and workers remittances.

  • SBP issues customers exchange rates on July 06, 2021

    SBP issues customers exchange rates on July 06, 2021

    KARACHI: The State Bank of Pakistan (SBP) on Tuesday issued customers’ exchange rates on the basis of weighted average rates of commercial banks.

    The SBP said that the data is compiled and disseminated for information only. These Exchange Rates are an estimate of the Exchange Rates quoted by various Commercial Banks to their clients.

    They are compiled from the Exchange Rate sheets issued daily by various Commercial Banks providing their indicative Exchange Rates for commercial transactions with customers.

    CURRENCYBUYINGSELLING
    AED43.088243.1824
    AUD119.9398120.1974
    CAD128.4550128.7341
    CHF171.8781172.2541
    CNY24.512324.5644
    EUR188.0485188.4634
    GBP219.6704220.1619
    JPY1.42691.4301
    SAR42.172242.2629
    USD158.1294158.4927
  • SBP reintroduces incentive scheme for banks for promoting inflow of home remittances

    SBP reintroduces incentive scheme for banks for promoting inflow of home remittances

    KARACHI: State Bank of Pakistan (SBP) on Monday reintroduced incentive scheme for banks to attract home remittances through formal channels.

    The SBP said that in order to further encourage promotion of home remittances through formal channels, the government of Pakistan has approved reintroduction of subject scheme with effective from July 01, 2021 to June 30, 2022 to cover home remittance performance for FY2021-22 compared to that of FY2020-21 as given below:

    1. Home remittances exceeding 5 per cent growth in FY22 (July 01, 2021 to June 30, 2022) compared with the levels achieved in FY21 (July 1, 2020 to June 30, 2021): the incentive shall be Rs 0.50 per each incremental USD mobilized over 5 per cent growth.

    2. Home remittances exceeding 10 per cent growth in FY22 (July 01, 2021 to June 30, 2022) compared with the levels achieved in FY21 (July 1, 2020 to June 30, 2021): As per (1) above, plus, Rs0.75 per each incremental USD mobilized over 10 per cent growt.

    3. Home remittances exceeding 15 per cent growth in FY22 (July 01, 2021 to June 30, 2022) compared with the levels achieved in FY21 (July 1, 2020 to June 30, 2021): As per (b) above, plus, Rs1 per each incremental USD mobilized over 15 per cent growth.

  • KIBOR rates on July 05, 2021

    KIBOR rates on July 05, 2021

    KARACHI: State Bank of Pakistan (SBP) on Monday issued following Karachi Interbank Offered Rates (KIBOR) on July 05, 2021.

    TenorBIDOFFER
    1 – Week6.907.40
    2 – Week6.957.45
    1 – Month7.017.51
    3 – Month7.207.45
    6 – Month7.427.67
    9 – Month7.518.01
    1 – Year7.578.07
  • Meezan Bank Sharia Board approves issuance of Ijara Sukuk

    Meezan Bank Sharia Board approves issuance of Ijara Sukuk

    KARACHI: Meezan Bank’s Shariah Board, In its 51st Shariah Board meeting, approved Shariah structure for issuance of new Government of Pakistan (GoP) Ijarah Sukuks.

    (more…)
  • Rupee depreciates by 31 paisas against dollar

    Rupee depreciates by 31 paisas against dollar

    KARACHI: The Pak Rupee ended down by 31 paisas against the dollar on Monday owing to demand of the foreign currency on the first day of the week.

    The rupee ended at Rs158.18 to the dollar from last Friday’s closing of Rs157.87 in the interbank foreign exchange market.

    Currency experts said that the demand for the foreign currency was high as the market was opened after two weekly holidays.

    They hoped that the local currency would make gain in coming days on back of substantial inflows of remittances and export receipts.

  • Banks to pay income tax on advance to deposit ratio

    Banks to pay income tax on advance to deposit ratio

    KARACHI: The Federal Board of Revenue (FBR) has said that in order to facilitate banking companies on payment of additional tax on earning arising from investment in government securities, a new regime has been introduced.

    The FBR said that the income of banking companies earned from additional investment in federal government securities for tax year 2020 and onwards was taxable at the rate of 37.5 per cent instead of rates provided in Division II of Part I of First Schedule.

    This provision has been further streamlined for prospective application. For tax year 2022 and onwards, the income arising from federal government securities shall be taxable on the basis of advances to deposit ratios of banks as under:

    — 40 per cent instead of rate provided in Division II of Part I of the First schedule if advances to deposit ratio as on last day of the tax year is up to 40 per cent

    — 37.5 per cent instead of rate provided in Division II of Part I of the First schedule if the advances to deposit ratio as on last day of the tax year exceeds 40 per cent but does not exceed 50 per cent

    — at the rates provided in Division II of Part I of the First schedule if advances to deposit ratio as on last day of the tax year exceeds 50 per cent.

    The amendments would reduce disputes regarding the calculation of additional investment and additional earning. Furthermore, the cut off rate to calculate advances to deposit ratio has been specified as last day of tax year.

    These changes have been incorporated by amending Rule 6C of the Seventh Schedule. 

  • SBP issues customers exchange rates on July 05, 2021

    SBP issues customers exchange rates on July 05, 2021

    KARACHI: The State Bank of Pakistan (SBP) on Monday issued customers’ exchange rates on the basis of weighted average rates of commercial banks.

    The SBP said that the data is compiled and disseminated for information only. These Exchange Rates are an estimate of the Exchange Rates quoted by various Commercial Banks to their clients.

    They are compiled from the Exchange Rate sheets issued daily by various Commercial Banks providing their indicative Exchange Rates for commercial transactions with customers.

     CURRENCYBUYINGSELLING
    AED43.006343.1013
    AUD118.6700118.9271
    CAD127.9000128.1731
    CHF171.1654171.5309
    CNY24.459424.5100
    EUR187.1909187.6133
    GBP218.3152218.7980
    JPY1.42051.4237
    SAR42.093142.1838
    USD157.8287158.1920