Pkrevenue.com

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.

  • State Bank modernizes forex rules to facilitate startups, fintechs

    State Bank modernizes forex rules to facilitate startups, fintechs

    KARACHI: State Bank of Pakistan (SBP) has modernized foreign exchange regulations to facilitate startups, Fintechs and exports, a statement said on Wednesday.

    The central bank notified revisions in chapter 20 of the Foreign Exchange Manual to facilitate Start-ups, Fintechs and Exports.

    The new policy for equity investment abroad will attract foreign direct investment through the establishment of holding companies by Pakistani fintechs and startups; support exports by facilitating exporters to establish subsidiaries or branch offices outside Pakistan; and, allow resident Pakistanis to acquire sweat equity, amongst other changes to the Foreign Exchange (FX) regulations.

    Further changes in the foreign exchange regulations will facilitate portfolio investment in the country including mutual funds, Exchange Traded Funds (ETF) and Real Estate Investment Trust (REIT) Funds through Pak rupee based Roshan Digital Account (RDA) and Special Convertible Rupee Account (SCRA).

    The SBP, after approval of the federal government, has introduced three new categories of investment abroad under its revised policy governing equity investment abroad and banks have been authorized to allow remittances under newly introduced categories.

    i. Establishment of Holding Company abroad by residents for raising capital from abroad: Pakistan’s investment regime is quite liberal that allows full freedom to repatriate profit, dividend and capital; however, some international investors prefer to invest indirectly through holding company established abroad specially in the Fintech and Startup firms. SBP’s revised policy will enable the Pakistani Fintech and startup companies to channelize foreign direct investment in the country by establishing a holding company abroad against remittance of up to USD 10,000 and subsequent swapping of shares to mirror the shareholding of local company in the holding company.

    ii. Establishment of subsidiary/branch office abroad by export oriented companies/ firms for promoting exports: The policy will enable the export oriented companies to establish subsidiary/ branch office abroad against remittance of 10% of their average annual export earnings of last three calendar years, or USD 100,000 whichever is higher. This will facilitate exploring new and non-traditional markets and capturing more export orders, as international buyers prefer dealing with subsidiaries/ representative offices of foreign companies present in their country. Accordingly, the proposed policy would help in growth of export-oriented companies and boost the exports of the country.

    iii. Investment abroad by Resident Individuals: The policy will allow the resident Individuals of Pakistan to acquire equity stake in international firms through share option plans or investment in listed securities subject to observance of annual ceiling of foreign exchange defined in the policy. In case of sweat equity a person can acquire upto twenty percent shareholding in a foreign company. These policy provisions will provide opportunities to individuals to earn foreign exchange for the country in the form of repatriation of dividend/ capital gains to Pakistan.

    Investment in Mutual/Private Funds in Pakistan by Non-Residents:

    With an objective to attract investment in the country, SBP has allowed the trading of units of funds quoted at Stock Exchange, including Exchange Traded Funds (ETF), Real Estate Investment Trust (REIT) Funds and close-end mutual funds, through Special Convertible Rupee Accounts (SCRA) and PKR version of Roshan Digital Account (NRP Rupee Value Account (NRVA)). These account holders have also been allowed to invest in units of Mutual Funds registered as Open End Schemes (OES) under the management of Asset Management Companies (AMCs) licensed by SECP to provide asset management services.

    Further, SBP has also allowed the private funds established and operated by Private Fund Management Companies licensed by SECP to provide private equity and venture capital fund management services, to issue units of their funds to non-resident investors.

    It is expected that these changes will help the mutual fund and private equity fund industry to grow by attracting foreign investment in the country. It will also facilitate overseas Pakistanis with Pak Rupee based Roshan Digital Account (RDA) and the non-residents in general to invest in funds in Pakistan.

  • Rupee advances by four paisas against dollar

    Rupee advances by four paisas against dollar

    The Pakistani Rupee demonstrated resilience in the foreign exchange market on Wednesday, making a noteworthy advancement of 04 paisas against the US Dollar.

    (more…)
  • MCB Bank declares 21pc rise in annual profit amid unprecedented growth in gain on securities

    MCB Bank declares 21pc rise in annual profit amid unprecedented growth in gain on securities

    KARACHI: MCB Bank on Wednesday announced an impressive 21 percent increase in net profit for the year ending December 31, 2020, primarily driven by remarkable growth in gains on securities.

    (more…)
  • Private sector credit offtake sharply increases by 62 percent in seven months

    Private sector credit offtake sharply increases by 62 percent in seven months

    KARACHI: The lending of commercial banks to private sector has surged by 62 percent in the first seven months (July – January) 2020/2021 owing to accelerated economic activities following reduction in coronavirus cases.

    The private sector borrowing increased to Rs283.45 billion during the first seven months of the current fiscal year as compared with Rs175 billion in the corresponding months of the last fiscal year, according to data released on Tuesday.

    Industry sources said that due to fall in coronavirus cases and availability of vaccine had helped to boost industrial and commercial activities.

    The lending to private sector by branches of conventional banks registered phenomenal growth of 98 percent to Rs152 billion during the first seven months of the current fiscal year as compared with Rs76.7 billion in the corresponding months of the last fiscal year.

    The private sector borrowing from Islamic banks increased to Rs57.3 billion during the period under review as compared with Rs20.2 billion in the corresponding period of the last fiscal year.

    The Islamic banking branches of conventional banks extended loan facilities to private sector to the tune of Rs74.46 billion during July – January 2020/2021, which fell from Rs78 billion in the same period of the last fiscal year.

  • Government borrowing from commercial banks increases by 26pc in seven months

    Government borrowing from commercial banks increases by 26pc in seven months

    KARACHI: The government borrowing from commercial banks has sharply increased by 26 percent during first seven months of the current fiscal year mainly due to financing the ballooning budget deficit.

    The government borrowing from commercial banks increased to Rs906.54 billion during first seven months (July – January) of 2020/2021 as compared with Rs720.68 billion in the corresponding period of the last fiscal year, according to statistics released by the State Bank of Pakistan (SBP) on Tuesday.

    The federal government borrows from scheduled banks through fortnightly auctioning of Market Treasury Bills (MTBs) of 3-, 6- and 12-month maturities. The federal also borrows long-term by quarterly auctioning of Pakistan Investment Bonds (PIBs)/Sukuk of 3, 5, 10, 15, 20 and 30 years maturities.

    The budget deficit for the first half of the current fiscal year widened to 2.5 percent of the GDP as the budget deficit was 2.3 percent in the same half of the last fiscal year, according to fiscal operation for first half of the fiscal year 2020/2021 issued by the finance ministry.

    The government financed the budget deficit with the domestic borrowing to the tune of Rs683.48 billion during the first half of the current fiscal year. Likewise, the government borrowing was Rs481.13 billion in the same half of the last fiscal year.

    Since there is restriction of borrowing from State Bank of Pakistan (SBP) the government is heavily dependent on commercial banks. During the period the government retired borrowing from SBP to the tune of Rs317.7 billion as against the retirement of Rs266 billion in the same period of the last fiscal year.

  • Rupee appreciates by 21 against dollar

    Rupee appreciates by 21 against dollar

    KARACHI: The Pak Rupee appreciated by 21 paisas against the dollar on Tuesday as positive sentiments prevailed after inflows of export receipts.

    The rupee ended Rs159.35 to the dollar from previous day’s close of Rs159.56 in the interbank foreign exchange market.

    Currency experts said that better exports had supported the local currency.

    Pakistan’s exports have crossed over $2 billion for the fourth consecutive months in January 2021 for the first time in last eight years, a official statement said.

  • Banking system witnesses Rs790 billion withdrawal in January

    Banking system witnesses Rs790 billion withdrawal in January

    KARACHI: A withdrawal of Rs790 billion has been seen from the banking system during January 2021 owing to higher demand following acceleration in the economy on ease in coronavirus related restrictions, experts said.

    (more…)
  • Rupee gains 43 paisas on improved export receipts

    Rupee gains 43 paisas on improved export receipts

    KARACHI: The Pak Rupee gained 43 paisas against the dollar on Monday owing to record export receipts during the last four months.

    The rupee ended Rs159.56 to the dollar from last Thursday’s closing of Rs159.99 in the interbank foreign exchange market.

    It is interesting to note that the rupee made gains despite closure of the market for the last three days as last Friday February 05, 2021 was declared as Kashmir Solidarity Day.

    Pakistan’s exports have crossed over $2 billion for the fourth consecutive months in January 2021 for the first time in last eight years, a official statement said.

  • Rupee gains 19 paisas ahead of long weekend

    Rupee gains 19 paisas ahead of long weekend

    KARACHI: The Pak Rupee gained 19 paisas against the dollar on Thursday despite the higher demand for dollar ahead of holidays.

    The rupee ended Rs159.99 to the dollar from the previous day’s closing of Rs160.18 in the interbank foreign exchange market.

    Currency dealers said that the market witnessed sufficient supply of the foreign currency in the shape of export receipts and workers’ remittances.

    They said the demand for import and corporate payments was also high because of upcoming three straight holidays.

    The government has announced public holiday on Friday February 05, 2021 on account of Kashmir Solidarity Day. It will follow with two weekly holidays, making three straight holidays.

  • Bank Alfalah declares 18pc decline in annual profit

    Bank Alfalah declares 18pc decline in annual profit

    KARACHI: Bank Alfalah Limited on Wednesday declared 18 percent decline in its annual net profit for year ended December 31, 2020 despite healthy growth in gain on securities.

    The after tax profit of the bank fell to Rs10.47 billion for the year 2020 as compared with Rs12.69 billion in the preceding year.

    The net mark-up and interest income was remained flat at Rs44.7 billion for the year under review as compared with Rs44.89 billion a year ago.

    The posted growth in non-markup/interest income to Rs12.79 billion for the year 2020 as compared with Rs10.35 billion in the preceding year. Under this head, the gain on securities sharply increased to Rs2.28 billion as compared with Rs64.79 million.

    The bank paid Rs7.4 billion as tax for the year as compared with Rs9.68 billion paid tax liability in the preceding year.

    The earnings per share of the bank fell to Rs5.89 from last year’s Rs7.15.

    Final cash dividend for the year ended December 31, 2020 has been announced at Rs2 percent share i.e. 20 percent. This is in addition to the interim cash dividend already paid at Rs2 per share i.e. 20 percent.