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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.

  • Meezan Bank’s Shariah Board approves guidelines for COVID related refinance schemes

    Meezan Bank’s Shariah Board approves guidelines for COVID related refinance schemes

    KARACHI: Meezan Bank’s Shariah Supervisory Board (SSB) has approved guidelines for COVID-19 related refinance schemes intended to provide relief to businesses and individuals during these challenging times.

    In the 47th meeting of Meezan Bank’s Shariah Supervisory Board (SSB) was recently held as an online event, with the goal of preventing contagion and staying consistent with the recommendations of global and local health authorities and the Government.

    This was the first Shariah Supervisory Board meeting conducted completely online where members from across different countries participated via video conferencing.

    The meeting was chaired by Justice (Retd.) Mufti Muhammad Taqi Usmani and was attended by Dr. Muhammad Imran Ashraf Usmani, Sheikh Esam Mohamed Ishaq (Bahrain) along with other members of the SSB.

    Meezan Bank’s Founding President and CEO – Irfan Siddiqui, Deputy CEO – Ariful Islam and senior management of the Bank were also present at the meeting.

    In view of the current situation and the outlook for the coming months, the Bank’s SSB has approved guidelines for COVID-19 related re-finance schemes intended to provide relief to businesses and individuals during these challenging times.

    The Board reviewed several key issues including policies adopted by the Bank as well as the corresponding contingency plans ensuring that the Bank continues to serve its customers normally despite the challenges faced due to COVID-19.

    Products and structures for providing relief to customers were also discussed in detail after which the SSB approved a comprehensive set of guidelines to ensure that SMEs get adequate support to mitigate the impact of the pandemic on their activities.

    The SSB also approved Smart Remittance Account that will enable Overseas Pakistanis to apply for bank accounts online either in PKR or USD currency from anywhere outside Pakistan.

    This account will permit Overseas Pakistanis to remit money either in PKR or USD and to invest in Shariah-compliant alternative of “Overseas Pakistanis Saving Scheme” announced by Government of Pakistan (GoP).

    Furthermore, the structure for the re-opening of GoP Ijarah Sukuk was also approved by the Board, making it the first time that a re-opening mechanism will be introduced in any Sukuk issued in Pakistan. The re-opening of Sukuk is expected to bring depth in the Pakistani Sukuk market.

    The SSB appreciated the Bank’s ‘Work from Home’ policy amid the COVID-19 crisis; which has been adopted to protect the wellbeing of its employees, customers and stakeholders and expressed its overall satisfaction on the Shariah compliance environment and operations of the Bank.

  • Rupee strengthens by Rs1.16 against dollar on inflows

    Rupee strengthens by Rs1.16 against dollar on inflows

    KARACHI: The Pak Rupee made significant gain of Rs1.16 against dollar on Thursday owing to ease in demand for import and corporate payments and substantial inflows during past week.

    The rupee ended Rs166.89 to the dollar from June 30, 2020 closing of Rs168.05 in interbank foreign exchange market.

    The currency market was remained closed for public dealing on July 01, 2020 on account of bank holiday.

    Currency dealers said that the rupee was under pressure due to payment demand by end of fiscal year.

    However, they said that the inflows from international financial institutions helped the rupee to gain the value.

    The State Bank of Pakistan (SBP) has received $1.3 billion as government of Pakistan loan disbursements from Chinese Banks this week.

    This brings the total amount of official inflows received since June 23, 2020 to around $3 billion.

    Experts said that the transfers would also help the central bank to improve foreign exchange reserves.

  • SBP directs banks, exporters to submit undertaking for true e-form

    SBP directs banks, exporters to submit undertaking for true e-form

    KARACHI: State Bank of Pakistan (SBP) has directed banks and exporters to submit undertaking for true e-form under export finance scheme.

    According to a circular issued on July 01, 2020 the banks shall provide details of exporters including name and address, NTN. Besides, the banks will also provide number and amount of export proceeds.

    Furthermore, both banks and exporters shall undertake that:
    In case of mismatch between the commodity and HS code provided, the entry will not be considered for performance/entitlement until rectified.

    The contents of subject MS excel file titled[Bank Prefix-Exporter’s NTN-Serial Number] are correct and complied with relevant instructions of the EFS.

    The exports on usance basis reported in the above referred statement are against irrevocable letter(s) of credit which is/are eligible for negotiation and the usance bills in respect thereof have not been negotiated with a scheduled bank in Pakistan except those mentioned there against.

    The statement does not include:

    I. Any export of commodities which do not qualify for export finance under the Scheme.

    II. Any export made under a Contract/LC against which they obtained export finance from any bank under Part-I of the Scheme (this clause is required in case of EF-1 Statements only).

    The SBP further said that through circular letter no. 12 dated June 26, 2020 wherein banks have been advised to get verified their EE-1/EF-1 statements and submit the same to concerned SBP-BSC offices.

    As it is in the knowledge of banks that in order to streamline the process and ensure smooth execution of workflow, hard copy submission of EE-1/EF-1 Statements has already been dispensed with and only soft copies of EE-1/EF-1 statement on the excel format attached at Annexure-I shall be submitted by banks.

    In addition, banks shall submit scanned copy of original undertaking duly signed by the exporter and the authorized personnel of the bank on the format attached at Annexure-II. Banks shall attach the scanned copy of the undertaking in the email containing soft copy of EE-1/EF-1 statement.

    The soft copies of EE-1/EF-1Statements of Karachi region shall be sent electronically to FEOD-HOK, through bank personnel’s official email address on: [email protected];whereas, for regions other than Karachi, the respective SBP-BSC Office will provide email addresses to banks’ Regional Heads.

    The following must be ensured by banks at the time of submission of email containing soft copy of EE-1/EF-1statement and undertaking:

    1. Email is properly titled as “Verification of EE-1/EF-1Statement: M/s [Exporter Name]”
    2. Excel file is properly titled as “[Bank Prefix –Exporter’s NTN –Serial Number]”.
    3. Single consolidated statement is submitted for each exporter having Advance Payment and Post-shipment entries.
    4. E-Form No. and NTN is in the correct format.
    5. Currency, Schedule and Sales Term is statedasper formatprovided in the list in drop-down of the relevant column in MS Excel file.
    6. All entries have been reported in ITRS.
    7. All shipping documents have been submitted for shipments against Advance Payments.

    The SBP said that soft copies of EE-1/EF-1statements should be submitted at FEOD Karachi and Field Offices along with undertaking strictly as per the formats provided.

  • SBP extends employment support scheme for three months

    SBP extends employment support scheme for three months

    KARACHI: State Bank of Pakistan (SBP) has extended the Rozgar scheme for another three months and, in collaboration with the Government of Pakistan, has increased the risk coverage for SMEs under the scheme.

    Soon after the outbreak of Covid-19 pandemic, SBP took a number of steps to provide economic support to businesses and households. SBP reduced the financial cost to the private and public businesses and households by reducing the policy rate by a cumulative 625 basis points since 17th March 2020. To improve the cash flow of businesses and households, it allowed deferment of principal amount and restructuring of loans. In addition to these measures, SBP introduced several refinance schemes to support employment and investment to fight the economic impact of COVID-19, the SBP said.

    Refinance Scheme to Support Employment and Prevent Layoff of Workers, commonly known as SBP Rozgar scheme: This scheme provides concessional loans to businesses for wages and salaries expenses provided they commit not lay off their employees for the period of the loan.  SBP has decided to extend the validity of this scheme by another 3 months to end September, 2020. Businesses will now be able to obtain financing to pay wages and salaries for a maximum period of 6 months starting April 2020 till September 2020.

    Effectively, this suggests that not only businesses can obtain loans to fund their wages and salaries bill up to a period of 3 months from July till September 2020, but can also get reimbursement for the wages and salaries paid during April-June 2020.  For those who have already availed financing under the scheme, financing limits for the months of July to September 2020 will be calculated on the same basis on which limits were calculated for the months of April to June 2020.

    Under the scheme, up till 19th June 2020, financing of Rs 112.8 billion have been approved by banks for 1653 businesses covering wages and salaries of over 1.1 million employees.

    The government Risk Sharing Facility under SBP Rozgar Scheme: With a view to incentivize banks/DFIs for financing to SMEs and non SME corporates, Government of Pakistan (GoP) introduced a Risk Sharing Facility (RSF) for SBP’s Rozgar Scheme.

    Under this facility, GoP bears 40 percent first loss on disbursed portfolio (principal portion only) for eligible borrowers.

    Government of Pakistan has now decided not only to extend validity of its risk sharing facility (RSF) for another three months for SMEs and small corporates with turnover of up to Rs 2 billion but also enhanced risk coverage for SMEs from 40 percent to 60 percent First Loss on portfolio basis.

    This higher risk coverage will help banks to provide financing under Rozgar scheme to collateral deficient SMEs which are otherwise struggling hard.

     SBP now expects that more SMEs will benefit from the scheme mainly due to higher risk coverage, more awareness of the scheme among the stakeholders and robust support mechanism to address queries and complaints with well organized set up comprising regional focal persons of SBP Offices and banks all across the country. Under the RSF, up till 19th June 2020, financing of Rs 25.4 billion have been approved by banks for around 1100 businesses covering wages and salaries of over 220,000 employees.

    It is expected that the above two measures will allow more businesses to benefit from these schemes and thereby support the employment of their employees.

  • Rupee gains 14 paisas on last day of fiscal year

    Rupee gains 14 paisas on last day of fiscal year

    KARACHI: The Pak Rupee gained 14 paisas against dollar on the last date of fiscal year 2019/2020 owing to transfer of loan amount from Chinese bank.

    The rupee ended Rs168.05 to the dollar from previous day’s closing of Rs168.19 in interbank foreign exchange market.

    The State Bank of Pakistan (SBP) has received $1.3 billion as government of Pakistan loan disbursements from Chinese Banks this week.

    This brings the total amount of official inflows received since June 23, 2020 to around $3 billion.

    Experts said that the transfers would also help the central bank to improve foreign exchange reserves.

  • NBMFCs allowed deferring loan repayment for one year

    NBMFCs allowed deferring loan repayment for one year

    ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has allowed non banking microfinance companies (NBMFCs) to defer loan payment of borrowers for one year.

    The SECP issued circular No. 21 of 2020 on Monday and allowed that NBMFCs may, upon a written request of a borrower received before September 30, 2020, defer repayment of principal loan amount by one year, provided that the borrower will continue to service the mark-up amount as per agreed terms and conditions.

    The SECP issued circular 09 of 2020 dated March 31, 2020 to allow three months’ extension in time to NBMFCs for accepting borrowers’ requests to defer repayment of principal loan amounts.

  • Bank holiday announced on July 01

    Bank holiday announced on July 01

    KARACHI: The State Bank of Pakistan (SBP) will remain closed for public dealing on Wednesday, July 1, 2020, which will be observed as ‘Bank Holiday’ enabling the bank to close its accounts, the central bank said in a statement on Monday.

    All employees of the Bank will attend to their official assignments (in-office or work-from-home, as designated under the current COVID-19 situation) on Bank Holiday treating it as a normal working day (except for public dealing), it added.

  • SBP enhances credit card limits under consumer financing

    SBP enhances credit card limits under consumer financing

    KARACHI: State Bank of Pakistan (SBP) on Monday enhanced credit card limit by amending regulations related to consumer financing.

    The SBP said that It had decided to revise the regulatory limits prescribed in the Para 1 and 2 of the Regulation R-8 of Prudential Regulations for Consumer Financing as under:-

    REGULATION R-8

    MAXIMUM CLEAN LIMIT FOR CREDIT CARD AND PERSONAL LOAN / FINANCING FROM ALL BANKs/DFIs

    EXISTING LIMITSREVISED LIMITS
    Total Clean Limits
    Credit Cards + Personal Loans – Rs2 million
    Total Clean and Secured Limits
    Credit Cards + Personal Loans – Rs5 million    		Total Clean Limits
    Credit Cards + Personal Loans – Rs3 million
    Total Clean and Secured Limits
    Credit Card + Personal Loans – Rs7 million
    Prime Customer
    Total Clean Limits
    Credit Card + Personal Loans – Rs5 million
    [subject to condition that clean limit assigned to a prime customer, on account of, personal loans limit will not exceed Rs2 million]    		Prime Customer
    Total Clean Limits
    Credit Cards + Personal Loans – Rs7 million
    [subject to condition that clean limit assigned to a prime customer, on account of, personal loans limit will not exceed Rs4 million]

    The SBP said that the Banks/DFIs may assign clean and secured limits to a single customer up to aforesaid amounts, in aggregate, from all Banks/DFIs.

    All other instructions on the subject shall, however, remain unchanged. The Banks/DFIs are advised to follow the regulations in letter and spirit. Any deviation or non-compliance of the same shall attract punitive action under the relevant provisions of the Banking Companies Ordinance, 1962.

  • Dollar strengthens to Rs168.19

    Dollar strengthens to Rs168.19

    KARACHI: The Pak Rupee ended down by 52 paisas against dollar on Monday owing to higher import and corporate payment demand, dealers said.

    The rupee ended at Rs168.19 to the dollar from last Friday’s closing of Rs167.67 in interbank foreign exchange market.

    The currency dealers said that the rupee was remained under pressure due to demand from importers and corporate buyers. They said that due to ending of the fiscal year most of multinational and foreign companies send profits to their parent companies.

    They further said that the ease in lockdown the business activities had started to get momentum and escalated the demand for imported goods.

    The currency dealers further said that the repayment of foreign debts had also weakened the rupee value.

    It is pertinent to mention that the SBP received around $1.7 billion last week from international financial institutions. However, the inflows also failed to give support to the local currency.

  • Rupee weakens by 31 paisas on import payment demand

    Rupee weakens by 31 paisas on import payment demand

    KARACHI: The Pak Rupee weakened by 31 paisas against dollar on Friday owing to higher demand for import and corporate payment as fiscal year ending next week.

    The rupee ended Rs167.67 to the dollar from previous day’s closing of Rs167.36 in interbank foreign exchange market.

    Currency dealers said that the local unit was under pressure due to demand related to fiscal year end especially corporate payment. They said the rupee was also under pressure due to last trading day of the week and buyers were purchasing dollars in advance for future payments.

    It is pertinent to mention that the SBP received around $1.7 billion this week from internaitonal financial insitutions. However, the inflows also failed to give support to the local currency.