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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.

Banks to reveal key information for deposit accounts

KARACHI: State Bank of Pakistan (SBP) on Monday issued guidelines for banks to ensure disclosure of key information for deposit accounts.

In a circular, the central bank said that effective disclosure is considered a fundamental component of the Financial Consumer Protection regime.

Standardized disclosures as Key Fact Statements (KFS) increase consumer comprehension about a banking product’s affordability and risks, leading to better decision-making.

Similarly, KFS also minimizes the risks of ineffective disclosures on part of the banks by standardizing the information provided to the consumer.

The SBP in its endeavor to promote Responsible Banking Conduct and Fair Treatment of Consumers (FTC) recognizes the importance of standardized disclosures.

Accordingly, KFS for consumer credit products and Most Important Document (MID) for third party products have already been issued vide CPD Circular No.3 of 2014, BC & CPD Circular No. 2 of 2016, and CPD Circular No. 2 of 2012.

KFS for deposit products have now been developed and are being issued through this circular for adoption as per the requirements listed below:

Banks/MFBs/DFIs are required to provide KFS to all their prospective customers from April 1, 2021, for comparison and decision making. Banks/MFBs/DFIs will ensure the availability of KFS in branches, on the website, e-banking interfaces, etc.

At the time of account opening, the KFS duly signed by the Banks/MFBs/DFIs, and the customer will be retained with the account opening form and its duplicate copy will be provided to the customer for record and information.

Banks/MFBs/DFIs are required to make necessary changes in their related SOPs and Policies for the seamless adoption of KFS to incorporate the requirement of KFS. Further, the provision of KFS as mentioned above in para 1 and the accuracy of the information contained therein will be checked by the Internal Audit during the regular audit.

Adequate consumer awareness initiatives and staff training may also be undertaken by Banks/MFBs/DFIs regarding the use of KFS and its vitality.

December 14, 2020
Rupee falls by 33 paisas on higher payment demand

KARACHI: The Pak Rupee fell by 33 paisas against the dollar on Monday owing to increasing demand for import and corporate payments.

The rupee ended at Rs160.47 to the dollar from last Friday’s closing of Rs160.14 in the interbank foreign exchange market.

Currency dealers said that demand for the foreign currency was higher because the market was opened after two weekly holidays.

They said that the demand for the greenback was higher because of improvement in the global economy after the introduction of covid vaccine.

December 14, 2020
Premium prize bonds of Rs25,000 denomination launched to discourage informal economy

ISLAMABAD: The government has launched registered prize bonds of Rs25,000 denomination to discourage the informal economy and comply with laws related to anti-money laundering and counter financing of terrorism.

Further, the decision to document the bearer prize bonds to comply with the conditions of Financial Action Task Force (FATF).

The decision is part of documenting all unregistered prize bond of all denominations. Prior to this the government in the year 2017 launched premium prize bonds of Rs40,000 denomination. The bearer bonds of Rs40,000 denomination can be withdrawn up to December 30, 2021.

Through a notification the Finance Division approved the issuance of premium prize bonds (registered) of Rs25,000 denomination from December 09, 2020.

At a same time the government also announced to discontinue bearer bonds of Rs25,000 denomination from December 09, 2020.

The total investment in Rs25,000 denomination bearer prize bonds is around Rs164 billion by end of October 2020. The investment in the unregistered prize bonds has to be surrendered by May 31, 2021.

Holders of the bearer prize bonds can be converted to premium prize bonds through SBP Banking Services, National Bank of Pakistan, Habib Bank Limited, United Bank Limited, MCB Bank Limited, Allied Bank Limited and Bank Alfalah Limited.

Furthermore, the bearer prize bonds can also be replaced with Special Saving Certificates or Defence Saving Certificates through SBP Banking Service Corporation and authorized commercial banks and National Savings Centers.

Furthermore, the bearer bonds can be encashed by transferring the proceeds to the bond holder’s bank account through SBP Banking Services Corporation and authorized commercial bank branches and the Saving Accounts at National Saving Centers.

According to the Finance Division, the draw of premium prize bonds would be held on quarterly basis in which 707 prizes would be awarded. The first prize will be Rs30 million.

The holder of premium prize bonds shall also get profit at 1.79 percent on biannual basis.

December 12, 2020
Remittances grow 27 percent during July – November

KARACHI – The State Bank of Pakistan (SBP) reported a significant 27% growth in workers’ remittances during the first five months (July-November) of the current fiscal year (FY21), underscoring a resilient trend in foreign inflows facilitated through formal channels.
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December 11, 2020
Banks allowed opening foreign currency accounts of entities operating in STZs

KARACHI: State Bank of Pakistan (SBP) on Friday allowed commercial banks to open foreign currency accounts by entities operating under newly established Special Technology Zones (STZs)

The SBP in a notification said that in order to further the objectives of establishing the Special Technology Zones under the Special Technology Zones Authority Ordinance, 2020, it has been decided to issue special foreign exchange regulations for entities operating in Special Technology Zones in Pakistan, in terms of sub-section 5 of Section 19 of the Ordinance and in exercise of powers conferred under the Foreign Exchange Regulation Act, 1947.

Accordingly, the following new paragraph 9A has been inserted after paragraph 9 of Chapter 6 of Foreign Exchange Manual:

9A – Special Foreign Exchange Regulations for Special Technology Zones (STZs)

Authorized Dealers may open Special Foreign Currency Accounts of entities licensed by Special Technology Zones Authority (STZA) under the Special Technology Zones Authority Ordinance, 2020.

Such foreign currency accounts can be fed with any proceeds, in favor of the entity, originating from abroad including foreign borrowing, proceeds from exports of goods and services, foreign equity, earnings / profits of overseas offices / subsidiaries / associates established through funds from these accounts, without the requirement of conversion into PKR. However, these accounts cannot be fed with cash foreign currency or any foreign exchange purchased from an Authorized Dealer or an Exchange Company in Pakistan for any purpose.

The funds available in such foreign currency accounts may be used by the account holders for making all types of business related legitimate payments abroad without any limitation and without any approval from SBP, subject to completion of applicable documentary/reporting requirements under relevant foreign exchange regulations.

In case sufficient funds are not available in Special Foreign Currency Accounts of such entities, with any Authorized Dealer in Pakistan, for making any legitimate payment abroad in foreign exchange, these entities may be allowed to make entire payment of the underlying transaction by purchasing foreign exchange from interbank market, subject to compliance with applicable foreign exchange regulations. However, Authorized Dealers shall obtain an undertaking from such entities to the above effect.

In case any local payment is required to be made from Special Foreign Currency Accounts by such entities, the same shall be allowed by Authorized Dealers after converting the funds, available in such accounts, into PKR through inter-bank market. However, no cash withdrawal will be allowed in the shape of FCY notes.

December 11, 2020
Rupee gains 15 paisas on improved inflows

KARACHI: The Pak Rupee gained 15 paisas against the dollar on Friday owing to significant inflows of workers’ remittances and improved foreign exchange reserves of the country.

The rupee ended Rs160.14 to the dollar from previous day’s closing of Rs160.29 in the interbank foreign exchange market.

Currency dealers said that positive sentiments prevailed in the foreign exchange market owing to improved foreign exchange reserves and inflows of workers remittances.

The liquid foreign exchange reserves of the country have increased by $160 million to $20.402 billion by week ended December 04, 2020, State Bank of Pakistan (SBP) said on a day earlier. The foreign exchange reserves of the country were at $20.242 billion by week ended November 27, 2020.

During the first five months of FY21, workers’ remittances have reached an unprecedented level of US$ 11.77 billion, 26.9 percent higher than the same period last year.

December 11, 2020
Rupee gains 19 paisas against dollar

KARACHI: The Pak Rupee gained 19 paisas against the dollar on Thursday owing to supply of the foreign currency in the market.

The rupee ended Rs160.29 to the dollar from previous day’s closing of Rs160.48 in the interbank foreign exchange market.

Currency dealers said that the market witnessed demand for import and corporate payments. However, the supply of the dollar in the shape of export receipts and workers remittances.

They said that the pace of inflows likely help the local currency to further gain value against the dollar.

Rupee depreciates by 10 paisas against dollar

December 10, 2020
Sale of Rs25,000 denomination prize bonds stopped

KARACHI: The government has stopped the sale of prize bonds of Rs25,000 denomination with immediate effect and the same shall not be encashed / redeemed after May 31, 2021, State Bank of Pakistan (SBP) said on Thursday.

The SBP said that the finance ministry had already issued instructions in this regard a day earlier. The ministry also announced the issuance of registered or premium prize bonds of Rs25,000 denomination.

The SBP issued following instructions to the president and CEOs of all commercial banks regarding option to replace / encash the bonds:

1. Conversion to Premium Prize Bonds (Registered)

i. The Bonds can be converted to Rs. 25,000/-denomination Premium Prize Bonds (Registered) through the 16 field offices of SBP Banking Services Corporation, and branches of six authorized commercial banks i.e. National Bank of Pakistan, Habib Bank Limited, United Bank Limited, MCB Bank Limited, Allied Bank Limited and Bank Alfalah Limited.

ii. The authorized commercial banks shall also issue Rs. 25,000/-denomination Premium Prize Bonds (Registered)as per the prescribed procedure, with immediate effect. Stock of the same has already been delivered to authorized commercial banks.

iii. The bondholder shall be required to submit a written request for conversion of bearer bonds to Rs. 25,000/-Premium Prize Bonds (Registered) on the prescribed application form.

iv. The bondholder shall also be required to submit prescribed application forms for registration / purchase of Premium Prize Bonds as per the procedure in vogue.

2. Replacement with Special Savings Certificate (SSC) / Defence Savings Certificate (DSC)

i. The Bonds can be replaced with SSC / DSC through the 16 field offices of SBP Banking Services Corporation, authorized commercial banks and National Savings Centers.

ii. All authorized commercial banks shall, therefore, accept requests for replacement of bearer bonds with SSC or DSC on the prescribed application form.

iii. The bondholder shall also be required to submit application form for purchase of SSC / DSC (SC-1) as per the prescribed procedure

3. Encashment at Face Value

i. The Bonds will only be encashed by transferring the proceeds to the bond holder`s bank account through the 16 field offices of SBP Banking Services Corporation, at authorized commercial bank branches and to the Savings Accounts at National Savings Centres.

ii. All commercial banks shall receive requests for encashment of bearer bonds on the prescribed application form.

A copy of the application form (Annexure A), duly signed and stamped, shall be provided to the bondholder as an acknowledgement receipt.

Moreover, the prize bonds encashed / replaced by the general public may be surrendered to the concerned SBP BSC office through the respective regional office of the commercial bank.

For this purpose, the regional office may intimate the SBP BSC office three days in advance so that necessary arrangements for receipt of the bonds can be made.

It is imperative to mention that a notice regarding the above-mentioned facilities must be displayed at prominent places within branch premises for awareness and information of the general public.

December 10, 2020
Rupee ends firmer

KARACHI: The Pak Rupee ended firmer against the dollar on Wednesday amid higher demand for import and corporate payments.

The rupee ended Rs160.48 to the dollar from previous day’s closing of Rs160.47 in the interbank foreign exchange market.

Currency dealers said that the demand for import and corporate payments were higher during the day. They said rising demand of the foreign currency from corporate side normally seen on the higher side in the month of December due to closing of the quarter.

They said that the market also witnessed supply of the dollar in the shape of export receipts and workers remittances.

December 9, 2020
Rupee ends down by 15 paisas on high import payment demand

KARACHI: The Pak Rupee ended down by 15 paisas against the dollar on Tuesday owing to higher demand for import and corporate payments.
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December 8, 2020