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.
KARACHI: A bank has deducted irrationally a huge amount as withholding tax from transactions made by an account holder.
(more…)KARACHI: The Banking Mohtasib has asked the State Bank of Pakistan (SBP) to restore the verification through biometric system for activation/re-activation of online banking services.
The non-availability of biometric verification system is creating unsafe environment for banking customers, according to annual report for the year 2020 issued by the office of Banking Mohtasib Pakistan on Thursday.
The Mohtasib said that the SBP vide its PSD Circular No. 9 of 2018, (dated November 28, 2018), made it mandatory for banks to have biometric verification at any branch of their banks for activation/ re-activation of online banking services, including internet/mobile banking for their customers.
The above instructions were suspended vide PSD Circular No. 2 of 2020 (dated March 18, 2020) which inter-alia was one of the measures to control the spread of pandemic of COVID-19.
However, it has been observed from complaints received in Banking Mohtasib Pakistan office that the fraudsters are taking advantage of suspension of bio-metric verification conditionality as since suspension the number of complaints relating to IBFT/internet banking transactions are increasing day by day.
“The SBP is, therefore, recommended to lift the suspension, if considered appropriate, or some alternate for bio-metric be introduced to reduce/avoid miseries of innocent account holders.”
In other recommendations to SBP, the Banking Mohtasib office pointed out systemic deficiencies and control weaknesses within banks.
Such weaknesses are brought to the attention of banks’ senior management. For issues of a serious nature, a report is submitted to the State Bank of Pakistan for action as it may consider appropriate.
Some of the issues which have been brought to the notice of State Bank of Pakistan for appropriate regulatory intervention are as under:
• It has been observed that instructions issued by SBP from time to time vide their different circulars are not followed by banks in letter and spirit. One of the reasons may be the inflow of variety of circulars and change in instructions or various modifications on the same subject which cannot be grasped / adopted by banks due to frequent changes in the instructions and influx of certain information from time to time.
It is, therefore, recommended that a Master Circular on each subject may be issued so that all the Instructions / modifications may be centralized and incorporated in a Master Circular in order to facilitate banks as well as all the stake holders.
• A comprehensive consumer complaints data is available, but at present it is dispersed among individual banks, SBP and Banking Mohtasib office. SBP and Banking Mohtasib Pakistan office have published some statistics in this regard, but there is a need for a consolidated data base of all consumer complaints which would facilitate the regulator as well as banks to better identify and address recurring problems and areas of weak controls. It is recommended that a data on all consumer complaints be made for effective analysis.
• Section 82 B (4) (b) of Part IV A of the Banking Companies Ordinance, 1962, confers the power and responsibility to the Banking Mohtasib to facilitate an amicable resolution of complaints after hearings. However, this is rendered impossible for the reason that the managers or officers of banks appearing at the hearing have no such authority from their institutions to negotiate and arrive at an amicable settlement and they tend to refer the simple issues to their Head Offices which not only delays the process of speedy justice, but also leads to a series of further communications.
Further, Banking Mohtasib Pakistan has noticed many instances where banks agree to make payment to complainants, but the process of their internal approval is largely found to be time consuming which defeats the very basic purpose of providing speedy justice.
The banks are thus required to make their complaint resolution mechanism compatible to relevant law to ensure prompt payment to the customer in case of complaints attaining finality under law or resolved by process of amicable settlement.
• Reducing of notice period of complaint from customers from 45 to 15 days as it appears to be a long period which deprives the Complainant from early resolution of their complaint.
• As per Section 82 D (1) of Banking Companies Ordinance, 1962, the Complainant is required to file his Complaint on Oath. However, It is suggested that amendment may be made in the relevant section and Complainant may be allowed to submit an undertaking instead of an attestation by the Oath Commissioner.
KARACHI: The Banking Mohtasib (Ombudsman) has provided a monetary relief of around Rs600 million in resolving over 16,000 complaints against banks during the year 2020.
The Banking Mohtasib Pakistan, Muhammad Kamran Shehzad unveiled the annual report 2020 at a press conference on Thursday.
According to the annual report of the office of Banking Mohtasib, during the period around 22,750 new complaints were received while 2,778 complaints were carried forward.
Thus, making total complaints in hand were 25,528, out of which 16,123 complaints were resolved amicably through reconciliation while after formal hearings, findings/ orders were passed in 166 cases.
Around 5,071 complaints were found incomplete and require further information or rejected being frivolous or for want of jurisdiction as the same either pertained to insurance matter or related to microfinance banks or fund managers or related to administrative matter of banks.
Prime Minister’s Portal (Government-owned system based on Mobile Application) was introduced in the year 2019 and complaints related to Banking Sector were referred to BMP Secretariat. During the year under review, the office of Banking Mohtasib received 12,046 complaints through Prime Minister’s Portal.
The report said that an increase of 56% was observed in the receipt of complaints during the year as compared to last year.
Efforts were made to dispose of the complaints expeditiously. However, depending on the complexity, some complaints take longer time to resolve.
People in Punjab province were seen more irritating with the services of the banking system. The Banking Mohtasib received the highest number of complaints i.e. 14,924 against banks located in the province.
It followed by Sindh 4,027, Khyber Pakhtunkhwa 2,070, Balochistan 317, Azad Kashmir 228, Gilgit Baltistan 68 and overseas 1,114.
During the year, the highest number of complaints lodged against Habib Bank Limited. A sum of 5,317 complaints were filed against the bank during the year 2020; out of which the Mohtasib secretariat received 2,654 complaints and the Prime Minister Portal received 2,663 complaints.
The second highest number of complaints was lodged against United Bank Limited. Around 3,098 complaints were lodged against the bank during the year; out of which 1,562 complaints were filed at Banking Mohtasib and 1,536 submitted at the Prime Minister Portal.
KARACHI: The Pak Rupee has maintained steady gain against the dollar for the last four trading days on Thursday owing to improved inflows of workers’ remittances and export receipts.
The rupee appreciated by 30 paisas against the dollar to close at Rs158.46 on Thursday from previous day’s closing of Rs158.76 in the interbank foreign exchange market.
The exchange rate was at Rs159.10 on February 19, 2021. However, since then the local currency recovered 64 paisas against the greenback in the interbank foreign exchange market.
Currency experts said that the rupee may make more gains in coming days owing to improved inflows of workers’ remittances and export receipts.
KARACHI: The State Bank of Pakistan (SBP) on Wednesday allowed five days forward sales and purchase of foreign exchange against export proceeds in order to facilitate managing exchange rate risks associated with realization of export proceeds.
The SBP issued following two circulars in this regard.
Five Days Forward Sale Facility against Export of Permissible Foreign Currency Notes
The SBP invited attention all Exchange Companies is invited to the instructions contained in Para (9)(i)(e), Chapter (3) of the Exchange Companies Manual whereby Exchange Companies are allowed to sell foreign exchange in Ready, Tom and Spot value dates, with banks as counterparty (Interbank Market).
2. In order to facilitate Exchange Companies in managing exchange rate risks associated with realization of export proceeds against export of permissible foreign currency notes, it has been decided that Exchange Companies may enter into forward sale transaction with banks up to 5 working days against export proceeds in US Dollars.
3. Accordingly, a new sub-para (e) (i) at Para (9) of Chapter (3) ibid has been added as under:
“Exchange Companies may sell forward the export proceeds received from abroad in US Dollars to banks against the export of permissible foreign currencies made on consignment basis through cargo/security companies subject to adherence of following terms and conditions:
a. Forward sale facility may be availed up to maximum five working days (including both transaction and settlement days).
b. In case Exchange Companies sell forward the export proceeds for less than five working days, forward sale period may be extended provided that the total period of forward sale, including the extended period, does not exceed five working days (including both transaction and settlement days). However, such extensions will be made by closing out the original contract and booking of a fresh contract at the new rate.
c. Forward sale may be booked before or after the export shipment.
d. Exchange Companies are required to bring export proceeds within 5 working days from the date of shipment. In case forward sale is booked on or after the shipment date, maximum maturity date of forward sale facility may be up to 5th working day of shipment date.
e. Forward sale may be booked for full or partial value of export proceeds against export shipment.
f. Forward sale will be booked based on specific export shipment. For this, Exchange Company shall provide copy of export documents including deal ticket confirmed with foreign buyer to the bank. In case of advance booking, Exchange Companies will submit copy of deal ticket confirmed with foreign buyer to the bank, while copy of other export documents will be submitted subsequent to the shipment.
g. No substitution is allowed for settlement of export proceeds.
h. Forward contracts, which are not taken up, may be closed out on the date of maturity at prevailing spot rate. Exchange gain, if any, will not be passed on to the Exchange Company, rather the same will be deposited in favor of State Bank of Pakistan by the bank. To this effect, the Exchange Companies are required to provide their consent/agreement in writing as prescribed by the bank before entering into forward contract.
4. Further, sub-para (i) of Para (4) of Chapter (5) ibid stands revised as under:
“Exchange Companies exporting permissible foreign currencies shall repatriate equivalent US Dollars in their foreign currency accounts maintained with banks in Pakistan. Such US Dollars against exports must be credited in foreign currency accounts within five working days from the date of export of foreign currencies”.
5. F.E. Circular No. 03 dated February 24, 2021 issued to Authorized Dealers is attached herewith for ready reference.
6. All other instructions relating to the subject shall remain unchanged.
Five Days Forward purchase Contract with Exchange Companies against Export of Permissible Foreign Currency Notes
The SBP invited attention of all Authorized Dealers is invited to the instructions contained in Chapter (4) of the Foreign Exchange Manual in terms of which Authorized Dealers may enter into contracts for forward purchase or sale of foreign currencies subject to the regulations set out in this chapter.
2. In order to facilitate Exchange Companies in managing exchange rate risks associated with realization of export proceeds against the export of permissible foreign currency notes, it has been decided that Authorized Dealers may enter into forward purchase transactions with Exchange Companies.
3. Accordingly, a new Para ‘3A’ has been added in Chapter (4) ibid as under:
“Forward Purchase of foreign exchange in US Dollars against export of foreign currencies by Exchange Companies licensed by SBP”.
i. Authorized Dealers may purchase forward the export proceeds in US Dollars received from abroad against export of permissible foreign currencies by Exchange Companies, subject to adherence of following terms and conditions:
a. Forward purchase facility may be provided up to maximum five working days (including both transaction and settlement days).
b. In case Authorized Dealers purchase forward the export proceeds in US Dollars against exports of permissible foreign currencies for less than five working days, Authorized Dealers may extend the maturity date provided that the total period of forward purchase, including the extended maturity period, does not exceed five working days (including both transaction and settlement days). However, such extensions will be made by closing out the original contract and booking of a fresh contract at the new rate.
c. Forward purchase may be booked before or after the export shipment.
d. Exchange Companies are required to bring export proceeds within 5 working days from the date of shipment. In case forward purchase is booked on or after the shipment date, maximum maturity date of forward purchase facility may be up to 5th working day of date of shipment.
e. Forward purchase may be booked for full or partial value of export proceeds against export shipment.
f. Forward purchase will be booked based on specific export shipment. For this, Authorized Dealers shall obtain copy of export documents from Exchange Companies. In case of advance booking, copy of confirmed deal ticket shall be obtained from Exchange Companies, while copy of other export documents shall be obtained subsequent to the shipment.
g. No substitution is allowed for settlement of export proceeds.
h. Forward contracts, which are not taken up, may be closed out on the date of maturity at prevailing spot rate. Exchange gain, if any, will not be passed on to the Exchange Company, rather the same will be deposited in favor of State Bank of Pakistan by Authorized Dealer. In case of exchange loss, the same will be recoverable from Exchange Company by Authorized Dealer. To this effect, the Authorized Dealer should get consent/agreement signed by the concerned Exchange Company before entering into forward contract. The exchange gain shall be deposited in favor of the State Bank through RTGS Clearing Account No. 427517. In this respect, a consolidated statement regarding all such cases shall be submitted by Head/Principal Office of Authorized Dealers to the Director, Off-Site Supervision & Enforcement Department on monthly basis as per prescribed format (Appendix V-145) in excel file at email [email protected]
4. In addition to above, Authorized Dealers may continue to purchase foreign exchange in Ready, Tom and Spot value dates, from Exchange Companies.”
KARACHI: National Bank of Pakistan (NBP) on Wednesday declared massive growth of over 93 percent in annual profit for period ended December 31, 2020.
The bank’s profit after tax grew to Rs30.56 billion for the year under review as compared with the net profit of Rs15.81 billion in the preceding year.
The significant growth may be attributed to sharp increase in gains from securities and reduction in operating expenses.
The net mark-up income of the banks grew to Rs104.15 billion for the year ended December 31, 2020 as compared with Rs71.9 billion in the preceding year.
Total income of the bank surged to Rs140.23 billion as compared with Rs108 billion.
The bank’s gains from securities posted a massive growth of 273 percent to Rs7.88 billion for the year under review as compared with Rs2.11 billion in the preceding year.
Operating expenses of the banks were at Rs62.79 billion for the year ended December 31, 2020 as compared with Rs65.7 billion in the preceding year.
Provisioning and write-offs has cost the banks to the tune of Rs30.89 billion as compared with preceding year’s Rs14.25 billion.
The bank declared Rs14.36 as earnings per share for the year ended December 31, 2020 as compared with Rs7.43 EPS in the preceding year.
The board of directors of the bank, however, not recommended any cash dividend, bonus issue/right shares or any other entitlement.
KARACHI: The Pak Rupee made a gain of 13 paisas against the dollar on Wednesday owing to positive sentiments prevailed over improved foreign inflows, dealers said.
The rupee ended Rs158.76 to the dollar from the previous day’s closing of Rs158.89 in the interbank foreign exchange market.
The currency dealers said that the positive indicators helped the local unit to make gain.
They said that the foreign inflows in the shape of exports receipts and workers’ remittances helped the market to move positively.
This is the second straight day when the rupee made gain against the greenback. A day earlier the local unit gained 18 paisas against the dollar.
KARACHI: The Pak Rupee gained 18 paisas against the dollar on Tuesday owing to improved supply of the foreign currency and current account remained in surplus during the first seven months of the current fiscal year, dealers said.
The rupee ended Rs158.89 to the dollar as compared with the previous day’s closing of Rs159.07 in the interbank foreign exchange market.
The dealers said that the market had witnessed improved supply of the foreign currency during the day that was sufficient to meet import and corporate demands.
Besides, they said that the current account of the country remained in surplus during the first seven months of the current fiscal year.
They said that the improved inflows of workers’ remittances and export receipts would help the local unit to make further gains in coming days.
KARACHI: The Pak Rupee gained three paisas against the dollar on Monday owing to improved inflows of workers’ remittances and export payments, dealers said.
The rupee ended Rs159.07 to the dollar from last Friday’s closing of Rs159.10 in the interbank foreign exchange market.
Currency dealers said that the market witnessed higher demand of the foreign currency due to market was opened after two weekly holidays.
However, inflows of workers’ remittances and export payments helped the rupee to make gains.
They said that due to fall in coronavirus cases the market was remained optimistic and dollar demand for import payment was gradually rising.
They, however, optimistic that the inflows of export receipts and workers’ remittances would help the local unit to gain values in coming days.
KARACHI: The World bank is hosting a webinar on ‘Consultative Dialogue on the State Bank of Pakistan’s Gender Financial Inclusion Policy – Banking on Equality’ on Tuesday, February 23, 2021, a statement said on Sunday.
During the webinar, Governor SBP, Dr. Reza Baqir will moderate a high profile international panel discussion.
The State Bank of Pakistan (SBP) has developed a draft policy titled ‘Banking on Equity’, which aims to introduce a gender lens within the financial sector through targeted measures to bring a shift to women friendly business practices and to significantly increase women’s financial inclusion in Pakistan, a statement said on Sunday.
This policy is currently in a public consultation phase and is expected to be launched shortly. SBP has held several Focus Group Discussions led by Governor SBP, Dr. Reza Baqir and Deputy Governor Sima Kamil with key stakeholders including government, financial institutions, regulatory bodies, academia, business federations, gender policy experts, civil society and women entrepreneurs.
This Webinar will draw on global experiences of gender responsive policies to inform how these may work effectively in the context of a developing country like Pakistan.
During the webinar, Governor SBP, Dr. Reza Baqir will moderate a high profile international panel discussion. Joining him will be Ms. Caren Grown (Global Director, Gender, World Bank), Ms. Mary Ellen Iskenderian (President & CEO, Women’s World Banking) and Ms. ParwatiSurjaudaja (President Director, Bank OCBC NISP Indonesia).
The panelists are renowned global experts with rich experience in women’s financial inclusion and the benefit of their insights will help conclude the consultative phase of this policy.
The program will include views from Hartwig Schafer (Vice President for the South Asia Region, World Bank), Alfonso Garcia Mora (Vice President for Asia and Pacific, IFC) while Deputy Governor SBP Ms. Sima Kamil will present the key pillars of the policy.