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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.

  • Rupee recovers Rs14.58 against dollar during current fiscal year

    Rupee recovers Rs14.58 against dollar during current fiscal year

    KARACHI: The rupee recovered Rs14.58 against the dollar during first nine months (July – March) of fiscal year 2020/2021.

    The rupee ended Rs153.09 on closing of March 30, 2021 as it was started the fiscal year Rs167.67 to the dollar.

    The rupee gained 95 paisas to close at Rs153.09 to the dollar on Tuesday as compared with previous day’s closing of Rs154.04 in the interbank foreign exchange market.

    Currency experts said that alarming rise in coronavirus cases had discouraged the demand of the foreign currency for import payment.

    The rupee also recovered Rs5.01 against the dollar during March 01 to March 30, 2021.

  • Rupee strengthens by 55 paisas against dollar

    Rupee strengthens by 55 paisas against dollar

    KARACHI: The Pak Rupee gained 55 paisas against the dollar on Monday owing to improved in external front and discoursing demand for import payment after rise in coronavirus cases.

    The rupee ended Rs154.04 to the dollar as compared with last Friday’s closing of Rs154.59 in the interbank foreign exchange market.

    Currency experts said that the importers were remained cautious over placing new order owing to alarming rise in coronavirus cases and considerations of complete lockdown.

    Besides, the experts said that approval of IMF tranche for Pakistan and expected inflows from sale of Eurobonds had also helped the rupee to make gain,

  • HBL approves Rs4bn investment in First MicroFinanceBank

    HBL approves Rs4bn investment in First MicroFinanceBank

    KARACHI: The Habib Bank Limited (HBL) to invest Rs4 billion in the First MicroFinanceBank Ltd. (FMFB) over the next three years, according to a statement issued on Monday.

    The board of directors (BOD) of HBL approved at the Annual General Meeting (AGM) authorized investment in the FMFB of up to Rs4 billion over the next three years to help FMFB to maintain a stronger capital base and provide sufficient headroom in its capital adequacy ratio (CAR) for ongoing business expansion and growth plans. However, to the investment is subject to the approval of the State Bank of Pakistan (SBP).

    The AGM also approved payment of final cash dividend of Rs3 per share i.e. 30 percent for the year ended December 31.2020, as recommended by the BOD to shareholders as at close of business on March 19, 2021, which is in addition to the 12.5 percent interim cash dividend i.e. Rs1.25 per share already paid.

  • SBP issues guidelines for processing sugar import at concessionary tax rates

    SBP issues guidelines for processing sugar import at concessionary tax rates

    KARACHI: State Bank of Pakistan (SBP) on Monday issued guidelines for banks to process application for import of raw sugar at concessionary tax rates.

    The SBP said that the government had allowed 300,000 metric tons of raw sugar to be imported by sugar millers at reduced withholding tax rate.

    The central bank further said that the ministry of commerce had issued a public notice in this regard.

    To comply with the public notice, the banks should process the requests of the sugar mills for import of raw sugar under the aforementioned Public Notice subject to the following:

    Import may be allowed to Sugar mills who have been issued quota by the Ministry of Commerce under the above-mentioned Public Notice;

    Import on CFR Free out basis may be allowed as an exception to the instructions given under Para 5 Chapter 13 of the FE Manual;

    Advance payment up to 100% of the value of the contract/proforma invoice may be allowed, subject to compliance with other applicable foreign exchange regulations given under Chapter 13 of the FE Manual;

    The SBP said that banks shall submit consolidated data of LCs issued and advance payments made, against issued quotas, to Foreign Exchange Operations Department, SBP BSC, Head Office, Karachi on daily basis.
    The SBP further directed that banks shall ensure compliance with all other terms & conditions of the Public Notice issued by Ministry of Commerce and bring the above instructions to the knowledge of all their constituents for meticulous compliance.

  • SBP signs pact for digitizing government payments

    SBP signs pact for digitizing government payments

    KARACHI: State Bank of Pakistan (SBP) on Monday signed an agreement with Controller General of Accounts Pakistan (CGAP) for digitizing payments of the federal government.

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  • Rupee strengthens by 58 paisas against dollar

    Rupee strengthens by 58 paisas against dollar

    KARACHI: The Pakistani Rupee exhibited strength against the US dollar on Friday, appreciating by 58 paisas in the interbank foreign exchange market.

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  • Immunity to SBP officials proposed in legal proceedings

    Immunity to SBP officials proposed in legal proceedings

    ISLAMABAD: The officials of State Bank of Pakistan (SBP) to be given immunity against any legal suit and prosecution for any act of commission or omission done in exercise of any powers.

    According to proposed amendments to the State Bank of Pakistan Act, 1956 issued by the finance ministry on Thursday, “No suit, prosecution or any other legal proceeding including for damages shall lie against the SBP, board of directors of member thereof, governor, deputy governors, member of any board committee and monetary policy committee, officers and employees of the central bank for any act of commission or omission done in exercise or performance of any functions, power or duty conferred or imposed by or under this Act upon such persons or any rules and regulations made thereunder or any legislation administered by the SBP unless such act is done in bad faith and with mala fide intent.”

    It is further proposed the governor, deputy governors, directors, members of any board committee and monetary policy committee, officers and employees of the bank shall not be liable in their personal capacity for any act of commission or omission done in their official capacity in good faith and in case of any such proceedings as mentioned in sub-section (1), they shall be indemnified by the bank which shall bear all the expenses thereof, till final decision of the case.

    Another immunity proposed to SBP officials, which stated: :”No action, inquiry, investigation or proceedings shall be taken by National Accountability Bureau (NAB), Federal Investigation Agency (FIA) or provincial investigation agency, bureau, authority or institution by whatever name called without prior consent of the board of directors of the SBP.”

    Whereas, the present law says: “Every (person in service) of the bank shall be deemed to be a public servant within the meaning of Section of the Pakistan Penal Code.”

    The proposed amendments also suggested increasing the tenure of SBP governor to five years from existing three years.

  • SBP issues revised mark-up subsidy for low cost house financing

    SBP issues revised mark-up subsidy for low cost house financing

    KARACHI: State Bank of Pakistan (SBP) on Thursday issued revised mark up subsidy allowed by the government for low cost housing scheme.

    The SBP issued instructions to the banks for implementation of the revised mark up subsidy approved by the government.

    In view of the feedback received from various stakeholders, Government of Pakistan (GoP) has decided to revise features of the G-MSS to align it with market dynamics. These revisions aim at significantly enhancing outreach of Scheme to the individuals and households who currently do not own a house.

    The key features of the revised G-MSS approved by the GoP are given below:


    Particulars    		Mark up Subsidy Program


    Eligibility Criteria    		All men/women holding CNIC First time home owner One individual can have subsidized house loan facility under this scheme only once


    Tiers of the Scheme    		Financing under Tier 0 is available through microfinance banks for financing of housing units under non-NAPHDA projects. Financing under Tier 1 is available through banks for financing under NAPHDA projects Financing under Tier 2 and Tier 3 is available through banks for financing of housing units under non-NAPHDA projects

    Size of Housing Unit
    Size of the loan is segregated into four tiers, as under: Tier 0 (T0) – (a) House upto 125 sq yds (5 Marla) and (b) flat/apartment with maximum covered area of 1,250 sq ft. Tier 1 (T1) – (a) House upto 125 sq yds (5 Marla) with maximum covered area of 850 sq ft and (b) Flat/apartment with maximum covered area of 850 sq ft. Tier 2 (T2) – (a) House upto 125 sq yds (5 Marla) and (b) flat/apartment with maximum covered area of 1,250 sq ft. Tier 3 (T3) – (a) House upto 250 sq yds (10 Marla) and (b) flat/apartment with maximum covered area of 2,000 sq ft.

    Age of housing units


    Newly constructed housing units during last one year from the date of application. However, this    requirement will not be applicable till March 31, 2023 under Tier 0, Tier 2 and Tier 3.


    Maximum Price of Housing Units
    Maximum Price (Market Value) of a single housing unit at the time of approval of financing, as under:
    Tier 1 (T1) – Rs 3.5 million
    Tier 0 (T0), Tier 2 (T2) and Tier 3 (T3) – No cap


    Maximum Loan size
    Maximum size of the loan of a single housing unit, as under:
    Tier 0 (T0) – Rs 2.0 million
    Tier 1 (T1) – Rs 2.7 million
    Tier 2 (T2) – Rs 6.0 million
    Tier 3 (T3) – Rs 10.0 million


    Loan type


    Long term housing finance loans


    Loan Tenor


    Minimum 5 years and maximum 20 years loan tenor, depending upon choice of customers.


    Security Requirements


    As per banks’credit policy and prudential regulations for housing finance, the housing unit financed will be    mortgaged in favor of financing bank.

    Allocation in Budget
    Finance Division shall give authority to SBP to debit GOP account on quarterly basis for the subsidy    payment to banks.

    Payment will be made to the banks on submission of quarterly-consolidated subsidy statement as per    format prescribed by State Bank.


    Pricing
    Pricing for Housing Loans: Loan Tiers Customer Pricing Bank Pricing Tier 0 5% for first 5 years &
    7% for next 5 years KIBOR+700 BPS Tier 1 3% for first 5 years &
    5% for next 5 years KIBOR+250 BPS Tier 2 5% for first 5 years &
    7% for next 5 years KIBOR+400 BPS
    (Spread may vary) Tier 3 7% for first 5 years &
    9% for next 5 years For loan tenors exceeding 10 years, market rate i.e. bank pricing will be applicable for the period exceeding 10 years.

    Executing Agency
    All commercial banks including Islamic banks, microfinance banks and House Building Finance Company    Limited (HBFCL)


    Application Form
    A standardized Application Form both in English and Urdu will require minimum essential information with    simple format.

    The processing time will not exceed 30 days after submission of all documents by the borrower and the    same will be clearly stated in the application form.


    Standardized Procedures    		Banks to have standardized loan documents and risk acceptance criteria

    Monitoring
    SBP will publish consolidated information about the loans extended under this program for information of    the public on quarterly basis on its website.


    Geographical distribution    		Whole of Pakistan

    The revised features are applicable with immediate effect. Accordingly, IH&SMEFD Circular No. 11 of 2020 is hereby superseded. However, instructions notified vide IH&SMEFD Circular No. 01 of 2021 will continue to remain applicable.

    The SBP directed the banks to ensure successful implementation of revised G-MSS through dissemination of necessary instructions to branches/ regions, capacity building of field staff, alignment of housing finance products and active marketing campaigns, etc.

  • Rupee gains 38 paisas on IMF funds approval for Pakistan

    Rupee gains 38 paisas on IMF funds approval for Pakistan

    KARACHI: The Pak Rupee gained 38 paisas against the dollar on Thursday as IMF approved transfer of $500 million to Pakistan under Extended Fund Facility (EFF).

    The rupee ended Rs155.01 to the dollar from previous day’s closing of Rs155.39 in the interbank foreign exchange market.

    Currency experts said that the market was remained positive due to approval of funds for Pakistan. A day earlier the IMF approved $500 million for Pakistan under EFF loan program.

    Further, they said that the importers were remained cautious in placing new import orders due to rising case of coronavirus in the country.

    The importers were expecting that the government would take harsh measures including strict lockdown in the wake of third wave of coronavirus.

  • Rupee strengthens by 46 paisas on lower import payment demand

    Rupee strengthens by 46 paisas on lower import payment demand

    KARACHI: The Pak Rupee strengthened by 46 paisas against the dollar on Wednesday owing to lower demand of the foreign currency on expectation of declining demand.

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