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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 cuts loan write-off history to 10 years

    SBP cuts loan write-off history to 10 years

    KARACHI: State Bank of Pakistan (SBP) has allowed to reduce the history of write-off/waived loans and advances for corporate borrowers from 15 years to 10 years.

    A statement issued on Thursday, the central bank said it had decided to reduce the reflection period of written off/waived loans and advances for corporate borrowers in the Electronic Credit Information Bureau (eCIB) of SBP from 15 years to 10 years.

    eCIB is a repository of information about the credit history of borrowers of the banking system and is largely used by banks/Financial Institutions to assess the creditworthiness of borrowers.

    This decision follows a detailed assessment of international practices.

    It has been a general impression that reflecting the negative history/ write-off for a longer period might deprive the borrowers of a fresh start and would exclude borrowers from access to finance for longer periods (following the write-offs/waivers) regardless of the borrowers’ current financial performance and other favorable information.

    It may be noted that various business bodies and Chamber Members frequently also raised such concerns.

    They were of the view that placing a one-time write-off/waiver in eCIB for 15 years is a long period particularly when a business has paid back or settled its transaction with the bank. It creates difficulties for businesses in availing fresh financing for a long time.

    Decreasing the reflection period to 10 years will bring our system in line with the international practice and provide a conducive business environment to boost economic activities besides helping to improve the country ranking in the Ease of Doing Survey conducted by the World Bank periodically.

    Credit Information Bureau/Credit registry (eCIB) is one of the supervisory tools used worldwide to assist the supervisors in off-site supervision and on-site examinations.

    SBP established its Credit Registry i.e. eCIB in 1992 with the objective to complement its role of prudential supervision and assessment of the risk monitoring functions of its regulated FIs.

    Since then, the eCIB of SBP has evolved from manual to modern electronic online credit reporting system fueled by improvements in system and technology.

    The existing eCIB system is not only helping in the expansion of credit but also enabling FIs to move from the traditional subjective approach of granting credit to a more efficient lending process.

  • SBP blocks payment for subscribing Indian contents

    SBP blocks payment for subscribing Indian contents

    KARACHI: State Bank of Pakistan has banned online payment for subscribing Indian entertainment content. In a circular issued to all banks, the SBP directed to block the payment to Indian content.

    The central bank said that the decision had been taken on the directives of federal cabinet to stop different modes of payments including credit cards for subscribing Indian content in Pakistan including Zee5 video-on-demand service.

    “In this regard, it is advised to ensure meticulous compliance of aforementioned instructions of the government of Pakistan and submit compliance status to PSD, SBP by November 13, 2020,” the central bank said.

  • Rupee advances by 16 paisas; dollar retreats to Rs158.33

    Rupee advances by 16 paisas; dollar retreats to Rs158.33

    KARACHI: The Pak Rupee made another gain of Rs16 paisas against dollar on Thursday owing to healthy inflows of workers’ remittances during the current fiscal year.

    The rupee ended Rs158.33 to the dollar from previous day’s closing of Rs158.49 in interbank foreign exchange market.

    Currency dealers said that the inflows of workers’ remittances during the current fiscal year helped the rupee to make gain.

    Further, the importers are cautious in purchasing dollars due to the second phase of coronavirus.

    The inflow of workers’ remittances has sharply increased by 26.5 percent to $9.43 billion during first four months (July – October) of current fiscal year 2020/2021. The central bank received $7.45 billion in the same months of the last fiscal year.

    The SBP said that remittances remained above $2 billion for the fifth consecutive month in October 2020.

    Workers’ remittances amounted to $ 2.3 billion during October 2020, increasing by 14.1 percent compared to October 2019.

    A large part of y/y increase in October 2020 was sourced from Saudi Arabia (30 percent), United States (16 percent) and United Kingdom (14.6 percent).

    Improvements in Pakistan’s FX market structure and its dynamics, efforts under the Pakistan Remittances Initiative (PRI) to formalize the flows contributed to the growth in remittances and limited cross-border travelling, the SBP said.

  • Assets of baking system increase by 7.8pc amid COVID challenges: SBP

    Assets of baking system increase by 7.8pc amid COVID challenges: SBP

    KARACHI: The assets of banking system increased by 7.8 percent during first half (January – June) 2020 despite challenging economic conditions prevailing during the period due to COVID-19 outbreak, State Bank of Pakistan (SBP) said on Wednesday.

    The SBP issued Mid-Year Performance Review (MPR) of the Banking Sector for the year 2020.

    The review comprehensively covers the performance and soundness of the banking sector for the period January to June 2020 (H1CY20).

    The expansion in assets was backed by banks’ investments, which increased by 22.8 percent (or Rs2.0 trillion). The surge in deposits provided the necessary funding support to finance the robust rise in investments.

    Advances, on the contrary, observed mild downtick owing to the economic slackness caused by the disruption inthe business activities after the outbreak. Sans SBP supportive measures, though, the contraction in advances could have been much higher.

    The review also highlighted that the policy measures rolled out by SBP facilitated the banking sector in conserving the capital, enhancing the lending capacity and increasing the loss absorption ability.

    As a result, despite some increase in credit risk, banking sector demonstrated improved profitability and enhanced resilience.

    The Non-performing loans (NPLs) ratio increased from 8.6 percent as of end December 2019 to 9.7 percent as of end June 2020.

    However, net NPLs to loans ratio, which is a better measure of credit risk, increased only marginally from 1.7 percent to 1.9 percent.

    The earnings marked visible improvement as profitability jumped by 52 percent on YoY basis. This improvement resulted from higher interest income, deceleration in interest expenses and rise in non-interest income.

    With better profitability, the soundness of the banking sector further strengthened as Capital Adequacy Ratio (CAR) increased to 18.7 percent in June-20 from 17.0 percent in December 2019.

    The review also includes the results of the 6th wave of SBP’s Systemic Risk Survey (SRS) conducted in July-August, 2020, which represents the views of the market participants.

    The survey results indicate that—at present and for the next six months—the respondents consider global risks and domestic macroeconomic risks to be important.

    Notably, the policy measures taken by SBP to mitigate the implications of COVID-19 have been very well received by the stakeholders.

  • Dollar eases to Rs158.49 as rupee further strengthens

    Dollar eases to Rs158.49 as rupee further strengthens

    KARACHI: The Pak Rupee made 20 paisas gain against dollar on Wednesday owing to rising coronavirus cases and lockdown discourage lowered demand for import payments, dealers said.

    The rupee ended Rs158.49 to the dollar from previous day’s closing of Rs158.69 in interbank foreign exchange market.

    The dealers said that the rising number of coronavirus cases and as a result of imposition of lockdown across the world dampened the demand of the foreign currency for import payment.

    The dealers said that positive sentiments, however, remained prevailed due to improved economic indicators including inflows of foreign remittances and export receipts.

    The rupee hit an all-time low of Rs168 on August 26, 2020.

    According to Pakistan Bureau of Statistics (PBS) the exports during the month of October 2020 increased by 3.07 percent to $2.08 billion as compared with $2.02 billion in the same month of the last year.

    Imports for the month fell by 5.73 percent to $3.82 billion as compared with $4.05 billion in the same month of the last year.

    The trade deficit reduced by 14.46 percent to $1.74 billion in October 2020 as compared with a trade deficit of $2.03 billion in the same month of the last year.

  • Rupee advances by 22 paisas; dollar slips to Rs158.69

    Rupee advances by 22 paisas; dollar slips to Rs158.69

    KARACHI: The Pak Rupee gained 22 paisas against dollar on Tuesday owing improved remittances and export receipts.

    The rupee ended Rs158.69 to the dollar from previous day’s closing of Rs158.91 in interbank foreign exchange market.

    The currency dealers said that importers were cautious in placing new orders due to the second wave of coronavirus across the glob.

    They further said that the inflows of export receipts and workers’ remittances are helping the local unit to improve levels.

    The rupee hit an all-time low of Rs168 on August 26, 2020.

    According to Pakistan Bureau of Statistics (PBS) the exports during the month of October 2020 increased by 3.07 percent to $2.08 billion as compared with $2.02 billion in the same month of the last year.

    Imports for the month fell by 5.73 percent to $3.82 billion as compared with $4.05 billion in the same month of the last year.

    The trade deficit reduced by 14.46 percent to $1.74 billion in October 2020 as compared with a trade deficit of $2.03 billion in the same month of the last year.

  • Dollar slips to Rs158.91

    Dollar slips to Rs158.91

    KARACHI – The Pakistani Rupee strengthened against the US Dollar on Monday, gaining 18 paisas. The improved economic indicators and reduced demand for import payments were cited as contributing factors to the rupee’s resurgence.

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  • Banking system witnesses Rs222 billion withdrawal in October

    Banking system witnesses Rs222 billion withdrawal in October

    The State Bank of Pakistan (SBP) has reported a significant withdrawal of Rs222 billion from the banking system during October 2020. According to SBP statistics, banking deposits fell to Rs16,664 billion by the end of October 2020, down from a record high of Rs16,886 billion at the close of September 2020.

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  • Rupee gains 37 paisas; dollar eases to Rs159.09

    Rupee gains 37 paisas; dollar eases to Rs159.09

    KARACHI: The Pakistani Rupee gained 37 paisas against the US dollar on Friday, closing at Rs159.09 from the previous day’s rate of Rs159.46 in the interbank foreign exchange market. This appreciation was attributed to lower imports and higher inflows of export receipts and workers’ remittances, according to currency dealers.

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  • Rupee gains 35 paisas; dollar falls to Rs159.46

    Rupee gains 35 paisas; dollar falls to Rs159.46

    KARACHI: The Pak Rupee gained 35 paisas against the dollar on Thursday owing to inflows of export receipts and workers’ remittances, dealers said.

    The rupee ended Rs159.46 to the dollar from the previous day’s close of Rs159.81 in the interbank foreign exchange market.

    The dealer said that the importers were cautious over upsurge in coronavirus cases in the country as well as in the world. On the other hand, positive sentiments prevailed in the market over improved export numbers in October 2020.

    The rupee hit an all-time low of Rs168 on August 26, 2020. Since then the local unit recovered Rs8.97 against the greenback.

    According to Pakistan Bureau of Statistics (PBS) the exports during the month of October 2020 increased by 3.07 percent to $2.08 billion as compared with $2.02 billion in the same month of the last year.

    Imports for the month fell by 5.73 percent to $3.82 billion as compared with $4.05 billion in the same month of the last year.

    The trade deficit reduced by 14.46 percent to $1.74 billion in October 2020 as compared with a trade deficit of $2.03 billion in the same month of the last year.