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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.

  • SBP issues revised features of PM’s youth business loan

    SBP issues revised features of PM’s youth business loan

    KARACHI: State Bank of Pakistan (SBP) on Friday issued revised features of Prime Minister’s Kamyab Jawan Youth Entrepreneurship Scheme.

    The SBP said that the government had approved revision in key features of loan program under Prime Minister’s Kamyab Jawan Youth Entrepreneurship Scheme.

    The revised features of the scheme as approved by the government are reproduced below:

    S. NoParticularsKamyab Jawan Program

    1
      Eligibility Criteria    		  All men/women holding CNIC, aged between 21 and 45 years with entrepreneurial potential are eligible. For IT/ E-Commerce related businesses, the lower age limit will be 18 years. Small and medium enterprises (startups and existing businesses) as per definition of SBP and owned by youth as per above mentioned age brackets are also eligible.

    For IT/E-Commerce related businesses, at least matriculation or equivalent education will be required.  

    2
      Loan size    		  Size of the loan is segregated into three tiers, as under:
    Tier 1 (T1) loans- Rs 100,000 to Rs. 1 million
    Tier 2 (T2) loans- Above Rs 1 million and upto Rs 10 million Tier 3 (T3) loans-Above Rs 10 million and upto Rs 25 million


    3
     Loan type    		  Long Term Loan for Machinery and Equipment / Working Capital Loan/ Running Finance, and Leasing of Business on wheels on 2/3/4 wheel locally manufactured vehicles.
    4 Loan TenorUpto 8 years with maximum grace period of upto one year.

    5
      Debt: Equity ratio    		  For New Businesses:
    Tier 1 – 90:10
    Tier 2 & 3 – 80: 20
    For Existing Businesses:
    Nil for all tiers
    The Borrower’s contribution of equity would be in the form of cash or immovable property and will be required after approval of loan.

    6 Focus on Women25% of the loans will go to women borrowers.

    7
      Security Requirements    		  Security arrangements will be as under:
    T1 loans: Clean; however only personal guarantee of the borrower
    T2 & T3 loans: As per bank’s own credit policy

    8
      Risk Mitigation    		  Government will bear credit losses (principal portion only) on the disbursed portfolio of the banks as under:
    T1 loans: Upto 50%
    T2 loans: Upto 20%
    T3 Loans: Upto 10%



    9
      Allocation in Budget    		  Finance Division shall allocate funds in each fiscal year’s budget as per estimates provided by SBP. Payment will be made on submission of consolidated claims of all banks by the SBP on quarterly basis.

    10
      Pricing    		  Pricing for Working Capital & Term Loans: Product Customer Pricing Bank Pricing Tier 1 3% KIBOR+400 BPS Tier 2 4% KIBOR+400 BPS Tier 3 5% KIBOR+400 BPS
    11 Executing AgencyAll Commercial, Islamic and SME banks are advised to come on board.
    12 Sectors and ProductsAll sectors and products including agriculture.

    13
      Application Form    		  The Form would be both in English and Urdu and require minimum essential information with simple format available on Government provided Kamyab Jawan portal. The processing time will not exceed 30 days and will be stated clearly in the application form. Non-refundable form processing fee will be Rs. 100/- inclusive of NADRA online CNIC verification fee.

    14
     Monitoring


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

    15
     Geographical distribution    		  Whole of Pakistan. In case of Balochistan, at least one branch of NBP will be designated per Division. All non-designated NBP branches will also provide and receive filled application forms and dispatch them to the nearest branches.

    16
     Additional Measures    		  Executing Agencies (EAs) under this program should ensure following additional measures: Criteria for assessing entrepreneurial potential should be developed and implemented. In case of loan for existing businesses, a robust independent verification mechanism may be introduced to ensure proper utilization of loans. Further, for new businesses, a robust mechanism for ongoing monitoring of the loans’ utilization should be developed and implemented. All loans previously disbursed or approved under this scheme will be converted into the new parameters with effect from July 01, 2020.

    The SBP directed the banks to gear up their systems for successful implementation of this scheme and to avoid any misuse of the scheme. Eligible borrowers may apply for the loans immediately after formal launch of the scheme by the Prime Minister’s Office.

  • Rupee gains 23 paisas against dollar on improved inflows

    Rupee gains 23 paisas against dollar on improved inflows

    KARACHI: The Pak Rupee strengthened by 23 paisas against dollar on Friday owing to better inflows and improved foreign exchange reserves of the country.

    The rupee ended 166.35 to the dollar from previous day’s closing of Rs166.58 in interbank foreign exchange market.

    Currency experts said that the improved foreign inflows helped the helped the rupee to gain value.

    The liquid foreign exchange of the country increased by $819 million to $18.79 billion by week ended July 03, 2020, State Bank of Pakistan (SBP) said a day ago.

    The foreign exchange reserves of the country were at $17.971 billion a week ago ended on June 26, 2020.

    The official reserves held by the SBP increased by $811 million to $12.042 billion by week ended July 03, 2020 as compared with $11.231 billion a week ago.

    The SBP attributed the increase in reserves to proceeds of $1,000 million as GOP loan disbursement from China.

    During the week, SBP also made government external debt payments of $ 231.2 million.

    The currency experts said that the lower import bill also helped the rupee to make gain.

    According to Pakistan Bureau of Statistics (PBS) the import bill of the country fell by 18.6 percent to $44.57 billion as compared with $54.76 billion in the preceding fiscal year.

    This helped the country to curtail the trade deficit for the year. The trade deficit of the country shrank by 27 percent to $23.18 billion during fiscal year 2019/2020 as compared with the deficit of $31.8 billion in the preceding fiscal year.

  • Meezan Bank to launch digital payments using Haball platform

    Meezan Bank to launch digital payments using Haball platform

    KARACHI: Haball, Pakistan’s leading B2B payments automation platform, in partnership with Meezan Bank – Pakistan’s first and largest Islamic bank, has recently announced the launch of Blink Direct, a service that will enable digital payments for Pakistani businesses and their supply chain partners.

    The new service will accelerate digital payments to payees while completely removing the friction caused by manual reconciliation errors. Meezan Bank customers will be able to link their bank accounts with the Haball App directly for performing transactions while reaping the benefits of a cashless supply chain, a statement said on Thursday.

    The Blink Direct facility, will allow Haball to address the challenge of delays in invoice reconciliation; an issue that plagues many large and small businesses, and causes payment delays as a result of which the working capital of the business is not managed efficiently.

    The service also maps each payment, invoice, pay order etc. to the context of why a payment was initiated.

    This allows corporate and distributors to reconcile their invoices and payments automatically, reducing errors and time required to reconcile every payment.

    Meezan Bank is the first bank in Pakistan to enable paperless digital payments for businesses using the Haball platform.

    Blink Direct is now available as a standard offering in the Haball App and Platform suite, eliminating manual payments and offering businesses greater transparency for the entire value chain including retailers, distributors and corporate entities.

    Omer Bin Ahsan, CEO – Haball commented on the occasion, “Blink Direct enables money to move digitally throughout the supply chain in the fastest and most reliable manner.

    “Haball has naturally progressed towards aggregating multiple payment options available in the country to give customers the freedom to transact through whichever medium they prefer, whether through their bank’s existing channel, through Haball’s App or through branches and agent networks.”

    Ariful Islam, Deputy CEO – Meezan Bank said: “By extending direct payment services to its customers using Haball, Meezan Bank is delighted to be able to solve the problems currently faced by many companies – needless roadblocks in the payments value chain and provide seamless and integrated digital payment services to enable a cashless supply chain.

    “We are very excited to be part of this innovation and are confident Inshallah that the supply chain vertical will soon benefit from the value of digital payment solutions.”

  • Rupee gains 18 paisas on improved inflows

    Rupee gains 18 paisas on improved inflows

    KARACHI: The Pak Rupee gained 18 paisas against dollar on Thursday owing to improved inflows of export receipts and workers’ remittances.

    The rupee ended at Rs166.58 to the dollar from previous day’s closing of Rs166.76 in interbank foreign exchange market.

    Currency experts said that the lowering demand for import and corporate payments and improved inflows helped the rupee to make gain.

    They said that the import bill of the country massively reduced during the fiscal year 2019/2020.

    According to Pakistan Bureau of Statistics (PBS) the import bill of the country fell by 18.6 percent to $44.57 billion as compared with $54.76 billion in the preceding fiscal year.

    This helped the country to curtail the trade deficit for the year. The trade deficit of the country shrank by 27 percent to $23.18 billion during fiscal year 2019/2020 as compared with the deficit of $31.8 billion in the preceding fiscal year.

  • SBP revises banking timings from July 13

    SBP revises banking timings from July 13

    KARACHI: State Bank of Pakistan (SBP) on Thursday revised timings for banks and microfinance banks to be observed from July 13, 2020.

    The central bank said that effective from July 13, 2020, the banks/MFBs shall observe the following office timings till further orders.

    However, banks/MFBs may prescribe business hours for branches as per their business requirement subject to observance of SBP business (banking) hours for public dealings as notified vide BPRD Circular Letter No. 20 dated April 23, 2020.

    The timings shall be:

    Monday to Thursday: 09:00 a.m. to 5:30 p.m. (with prayer / lunch break from 1:30 p.m. to 2:00 p.m.)

    Friday: 09:00 a.m. to 5:30 p.m. (with prayer / lunch break from 1:00 p.m. to 2:30 p.m.)

    The SBP said that all banks / MFBs are accordingly advised to ensure compliance of the above-mentioned timings in letter and spirit.

  • SBP asks banks not to accept institutional investment in saving schemes

    SBP asks banks not to accept institutional investment in saving schemes

    KARACHI: State Bank of Pakistan (SBP) on Thursday informed banks about restriction imposed on institutional investment in saving schemes.

    The central bank said that the Central Directorate of National Savings (CDNS) on July 01, 2020 restricted participation of institutional investors in national saving schemes.

    In this connection, the SBP advised all authorized commercial banks to review the instructions contained in the above mentioned letters and ensure that no institutional investment of any kind should be accepted in National Savings Schemes (NSS) dealt by banks i.e. Special Savings Certificate (SSC) / Defence Savings Certificate (DSC) on or after July 01, 2020.

    The SBP asked the banks to disseminate necessary instructions down the line to all authorized branches and concerned officials for information and strict compliance.

  • Pak Qatar Family Takaful to offer products, services through digital media

    Pak Qatar Family Takaful to offer products, services through digital media

    KARACHI: Pak-Qatar Takaful Group has decided to use digital media to offer its products and services in the wake of COVID-19 in order to provide the best possible convenience to its valuable members and customers.

    (more…)
  • Rupee gains 19 paisas in interbank

    Rupee gains 19 paisas in interbank

    KARACHI: The Pak Rupee gained 19 paisas against dollar on Wednesday owing to improved inflows of export receipts, dealers said.

    The rupee ended Rs166.76 to the dollar from previous day’s closing of Rs166.95 in interbank foreign exchange market.

    Currency experts said that during the past few days the demand for dollar was on the higher side resulting in ease in rupee value.

    They further said that the inflows of export receipts and from international financial institutions had helped the rupee to gain the value.

  • SBP slashes refinance rate to five percent for temporary, long term schemes

    SBP slashes refinance rate to five percent for temporary, long term schemes

    KARACHI: State Bank of Pakistan (SBP) has decided to reduce the mark up rates on temporary economic refinance facility (TERF) to five percent from 7 percent and on long term financing facility (LTFF) from non-textile sector to five percent from six percent.

    The central bank on Wednesday said that taking cognizance of the negative fallout of COVID-19 Pandemic for the economy, SBP has been constantly taking steps to safeguard the businesses and households and a reduction in the policy rate has been a key step since March 2020.

    SBP has reduced the policy rate by 625 basis points since 17th March, 2020 to 7 percent.

    To extend the benefits of this reduction in the policy rate to the users of its refinance schemes, SBP has now decided to align the end user markup rates on two of its refinance schemes for promoting investment in the country.

    Temporary Economic Refinance Facility (TERF): SBP introduced this facility to provide stimulus to the economy by supporting new investment and balancing, modernization and restructuring (BMR) of the existing projects.

    To further improve the incentive under the scheme, SBP has lowered the end user mark-up rates from existing 7 percent to 5 percent.

    SBP will now be providing refinance to banks at 1 percent with banks’ maximum margin of 4 percent. Further, SBP has also allowed the TERF facility in cases where LCs/Inland LCs were opened prior, but retiring after the introduction of the scheme on March 17, 220.

    These measures, in the backdrop of earlier policy action of allowing BMR under TERF, are expected to further support the economic activity, new long term investment and employment generation.

    Under this scheme, up till 2nd July 2020, Rs10.5 billion have been approved by banks for 21 projects.

    Long Term Financing Facility (LTFF): LTFF is one of the oldest refinance schemes of SBP under which financing is available for export-oriented projects for purchase of imported and locally manufactured new plant and machinery.

    In March, 2020 SBP opened the LTFF to all sectors across the board. Earlier the end user markup rate under this scheme were 5 percent for textile sector and 6 percent for non-textile sectors.

    State Bank has now reduced its refinance rate for non-textile sector by 1 percent and therefore the end user rate for all sectors across the board will be 5 percent.

    It is expected that the above measures will help facilitate long term investment in both domestic and export market.

  • SBP appoints 12 primary dealers for government securities

    SBP appoints 12 primary dealers for government securities

    KARACHI: State Bank of Pakistan (SBP) has appointed 12 financial institutions as primary dealers for government securities for the fiscal year 2020/2021.

    The central bank said that applications were invited for selection of primary dealers for the Financial Year (FY) 2020-2021 vide DMMD Circular Letter No. 01 dated May 15, 2020 from all Banks, Development Finance Institutions, Investment Banks and Listed Brokerage Houses.

    The central bank received twelve applications for appointment of Primary Dealers of Government Securities (PIB & MTB).

    Upon evaluation of each applicant’s performance under the criteria laid down in the aforesaid rules, the following institutions have been selected as Primary Dealers of Government Securities (PIBs & MTBs) for FY 2020-2021

    1. HABIB BANK LIMITED

    2. NATIONAL BANK OF PAKISTAN

    3. BANK AL-FALAH LIMITED

    4. JS BANK LIMITED

    5. ALLIED BANK LIMITED

    6. PAK OMAN INVESTMENT COMPANY LIMITED

    7. MCB BANK LIMITED

    8. UNITED BANK LIMITED

    9. FAYSAL BANK LIMITED

    10. STANDARD CHARTERED BANK (PAKISTAN) LIMITED

    11. CITI BANK N.A (PAKISTAN OPEARTIONS)

    12. THE BANK OF PUNJAB

    Top three performing PDs during FY 2019-2020 are as under:

    Habib Bank Limited

    National Bank of Pakistan

    Bank Al-Falah Limited