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.
The US dollar surged to an all-time high against the Pakistani rupee, reaching Rs153 during midday trading on Thursday. This significant increase is attributed to weak economic indicators, which have placed considerable pressure on the local currency.
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ISLAMABAD: Banks shall pay 37.5 percent income tax on profit from investment in government securities, according to proposals made through Finance Bill, 2019.
The Federal Board of Revenue (FBR) in explanation to the Finance Bill, 2019 said that banks are earning substantial profits on account of incremental exposure to government securities.
Therefore profit from such government securities as is in excess of twenty percent of total profit before tax is being taxed separately at the rate of 37.5 percent.
The FBR further said that banks generally do not offer for taxation the provisions which were previously allowed but later on reversed. Therefore reversal of provisions already allowed is being made taxable by inserting an explanation in the Seventh Schedule.
Banks are also allowed to claim deduction in respect of provisions classified as “doubtful” and “loss”. Now only deductions only in respect of provisions classified as “loss” are to be allowed.
KARACHI: The Pak Rupee fell by 10 paisas against dollar on Wednesday owing to demand for import and corporate payments.
The rupee ended Rs151.57 to the dollar from previous day’s closing of Rs151.47 in interbank foreign exchange market.
The foreign exchange market was initiated in the range of Rs151.50 and Rs151.75. The market recorded day high of Rs152.00 and low of
Rs151.40 and closed at Rs151.57.
Currency experts said that the rupee would remain stable till the end of current fiscal year or June 30, 2019.
The exchange rate in open market also witnessed depreciation in rupee value.
The buying and selling of dollar was recorded at Rs151.30/Rs152.00 from previous day’s closing of Rs151.00/Rs152.00 in cash ready market.
KARACHI: The Pak Rupee weakened by Rs1.36 against the US dollar on Tuesday as demand persists for import payment.
The rupee closed at Rs151.47 to the dollar from previous day’s close of Rs150.11 in interbank foreign exchange market.
Currency experts said that the rupee declined due to weak economic conditions.
They said that the economic survey launched yesterday presented bleak picture of Pakistan’s economy.
The exchange rate also witnessed depreciation in rupee value.
The buying and selling of dollar was recorded at Rs151.00/Rs152.00 from previous day’s closing of Rs150.10/Rs150.40 in cash ready market.
ISLAMABAD: The government has borrowed Rs3.2 trillion from State Bank of Pakistan (SBP) for budget financing during first ten months of current fiscal year, Economic Survey of Pakistan revealed.
The survey released a day earlier stated that during July 01, 2018-April 26, 2019 government borrowed Rs 1,073.0 billion for budgetary support compared to Rs 850 billion in the same period last year, of which, government has borrowed from SBP Rs 3,204.7 billion as compared to Rs 1,316.1 billion last year.
On the other hand, government retired Rs 2,131.7 billion to scheduled banks against retirement of Rs 466.1 billion in last year. Net government sector borrowing thus remained at Rs 908.0 billion during the period under review compared with Rs 813.6 billion last year.
During the period 01 Jul-26 Apr, FY2019 money supply (M2) increased by Rs 625.3 billion (growth of 3.9 percent) compared with Rs 601.8 billion (4.1 percent) in comparable period of last year.
Net Domestic Assets (NDA) is the main contributor to M2 growth.
Net Foreign Assets (NFA) point contribution is negative and stood at (-5.5 percent) during the period under review compared with (-3.3 percent) in the same period last year.
NDA point contribution has increased to 9.4 percent compared with 7.4 percent last year. NDA point contribution growth partially offset by NFA negative growth, thus overall money supply grew by 3.9 percent during the period under review.
On the other hand, reserve money posted an expansion of Rs 488.0 billion (growth of 8.9 percent) during 01 Jul-26 Apr, FY2019 against Rs 260.5 billion (5.4 percent) last year.
SBP’s NDA posted a growth of 22.5 percent compared with 18.18 percent during the same period last year, whereas, SBP’s NFA decreased by Rs 743.8 billion compared with contraction of Rs 473.7 billion in the comparable period last year.
Therefore, reserve money growth stemmed from NDA of the SBP whereas NFA outstanding stock remained negative during the period under review.
Within Broad Money, NFA of the banking sector further contracted to Rs 882.4 billion during 01 Jul-26 Apr, FY2019. During same period last year, it was contracted by Rs 475.4 billion.
Therefore, SBA and scheduled bank’s NFA remained negative during the period under review.
During the period 01 Jul-26 Apr, FY2019 NDA of the banking sector registered an expansion of Rs 1,507.7 billion (growth of 9.3 percent) compared with Rs 1,077.2 billion (7.7 percent) during the comparable period last year.
NDA of SBP increased by Rs 1,132.5 billion as compared with Rs 661.5 billion during same period last year.
The NDA of scheduled banks witnessed an expansion of Rs 375.1 billion compared to expansion of Rs 415.7 billion in the same period of last year.
Government sector borrowing and private sector credit mutually impacted NDA growth of the banking system, which was more than offset the contraction in NFA of the banking system.
Consequently, broad money growth increased to 3.9 percent during 01 Jul-26 Apr, FY2019 as compared to 4.1 percent during the comparable period last year.
Credit to Public Sector Enterprises (PSEs) increased by Rs 312.1 billion during the period 01 Jul-26 Apr, FY2019 against Rs 153.2 billion during the same period of last year.
ISLAMABAD: The Central Directorate of National Savings (CDNS) to issue scripless registered prize bonds amongst all denominations with objective to document the economy.
Economic Survey 2018/2019 released by the finance ministry of Monday, said that in collaboration with SBP, National Savings is in the process of introduction of registered scripless prize bonds amongst all denominations.
The registered prize bonds will be a step towards documentation of the economy while providing facility to the general public.
The CDNS remained in the process of restructuring and transformation in the Fiscal Year 2019. In this regard, the achievements made in the first nine months and initiatives in the pipeline are as under:
IT Transformation:
Starting from 2002-03, National Savings has gone a long way towards computerization and automation of its processes.
Out of 375 National Savings Centers (NSCs), 222 have been computerized. In the last one year, some more milestones have been achieved for transformation of the organization into an Information Technology enabled entity.
i. A data center has been established at National Telecommunication Corporation (NTC) and now 205 NSCs are connected to centralized location through Wide Area Network (WAN) whereas NTC is working for provisioning of connectivity at remaining NSCs.
ii. CDNS Main Application System has been upgraded into state-of-the-art Business Application Solution and deployed at 35 National Savings Centers while remaining NSCs are in the process of migration to the centralized architecture by using the newly upgraded Business Application Solution. The aforesaid achievement has enabled CDNS for provisioning of advance, efficient and value-added services to its customers using Alternative Deliver Channels (ADCs) i.e. Debit/ATM Cards, etc.
iii. Protocols have been laid down with National Database Registration Authority (NADRA) for obtaining Verisys and Biosys, which are necessary in the new digitized set up of the organization.
iv. Vendor has been selected for providing the card (ATM/Debit Card) solution for CDNS.
v. Agreement with 1Linkhas been signed for providing connectivity with banking sector/ATM operations.
Achievement of Annual Targets:
CDNS, being the foremost institution providing the avenue to general public to park their savings has been able to not only achieve the targets assigned but also surpassed by a big margin. As of 30.04.2019, the CDNS has achieved 213 % of the Gross and 191% of proportionate targets.
Initiatives in the Pipeline:
Sharia Product of National Savings
There was a persistent demand of Sharia compliant product and CDNS has responded to it and has developed its first-ever Sharia Compliant product called Sarwa Islamic Savings Account (SISA) for those who desire to invest only in the Sharia-compliant scheme of CDNS. The Draft rules for it have been printed in the Gazette of Pakistan and after approval of the Cabinet Committee for Disposal of Legislative Cases (CCLC) and the Federal Cabinet, the proposed SISA Scheme will be introduced across the country.
Overseas Pakistanis Savings Certificates (OPSCs)
The Pakistani diaspora abroad wanted to have a secure investment channel for their savings while Government of Pakistan, in order to increase more also looked for bringing remittances into formal money channels which were mostly coming via informal channels. In this regard, to fill the void, OPSCs has been designed as a product by CDNS to be launched for Overseas Pakistanis only. It will be launched initially in the Gulf Cooperation Council (GCC) market and then other countries. The Agreement with Manger To the Issue (MTI) has been almost finalized. Being a scripless security, OPSCs will be offered in both the US$ and rupee currencies. It is expected that they will be launched in the Fiscal Year 2019-20.
Launch of Rs. 100,000 Premium Prize Bond (Registered)
After successful launch of Rs.40000, Premium Prize Bond (Registered) National Savings is in the process of launching another registered prize bond for Rs. 100,000
Debit Card Launch & Membership of 1Link System
In near future National Savings is launching ATM Debit Cards with the support of the Karandaaz Pakistan.
ISLAMABAD: State Bank of Pakistan (SBP) enhanced policy rate by 650 basis points during last 18 months (January 2018 to date) for macroeconomic stabilization.
According to Economic Survey 2018/2019 issued by the ministry of finance on Monday said the SBP had adopted policy rate reversal and gradually increased it by a cumulative 650 bps since January, 2018.
“Despite increase in policy rate, Weighted Average Lending Rate (WALR) remained stable which translated into healthy private sector credit demand.”
Credit to private sector (CPS) increased to Rs 775.5 billion during FY2018 against Rs 747.9 billion last year. Significant increase in credit demand primarily came from working capital and fixed investment in the preceding year.
During the period July-March, FY2019 CPS increased to Rs 554.7 billion compared with Rs 401.1 billion during same period of last year.
Of which working capital loans received the major share and stood at Rs 369.0 billion compared to Rs 215.3 billion last year. While fixed investment decelerated to Rs 83.1 billion against Rs 148.1 billion in the comparable period last year.
The survey said that the monetary policy is an important tool to achieve price stability and manage economic fluctuations.
Inflation targeting has emerged as the leading framework for monetary policy over recent decades in many advanced and in low income economies.
Monetary policy role after global financial crises has extended as macro prudential policy which required strong institutional framework for financial stability and to achieve twin objectives of price and output stabilization.
Pakistan’s economy witnessed a consumption led growth of 5.53 percent during preceding year FY2018.
The incumbent government has inherited the economy facing multiple challenges including unsustainable twin deficits that pose serious risks to the economy.
Hence, to correct the imbalances in the economy, authorities have taken steps to curtail the fiscal deficits and tighten monetary policy to contain demand.
SBP has significantly tightened monetary policy, and allowed greater flexibility in the exchange rate adjustments to curb excessive aggregate demand and move towards macroeconomic stabilization.
This trend is in line with the global trends. The global economic expansion has weakened and projected to slow down from 3.6 percent in 2018 to 3.3 in 2019, before returning to 3.6 percent in 2020.
Following a notable tightening of global financial conditions during second half of 2018, conditions have eased in early 2019 as the US Federal Reserve signaled a more accommodative monetary policy stance and markets became more optimistic about a US–China trade deal.
The US federal funds rate is expected to increase to about 2.75 percent by the end of 2019. Policy rates are assumed to remain at close to zero in Japan through 2020 and negative in the Euro area until mid-2020.
KARACHI: The Pak Rupee ended down by Rs2.51 against dollar on Monday due to high demand for import and corporate payments as the currency market opened after a week.
The rupee ended at Rs150.11 to the dollar from June 03, 2019 trading of Rs148.60 in interbank foreign exchange market.
The interbank foreign exchange market was initiated in the range of Rs149.00 and Rs149.50.
The market recorded day high of Rs151.25 and low of Rs149.50 and closed at Rs150.11.
Currency experts said that the market was remained closed during June 04 to June 09 due to Eid and weekly holidays. The weeklong holidays jacked up the demand for import payments and corporate payments.
The exchange rate also witnessed depreciation in rupee value in open market.
The buying and selling of the dollar was recorded at Rs149.50/Rs150.50 as compared with June 03 closing of Rs147.80/Rs148.80.
The Pakistani rupee experienced a significant decline against the US dollar in mid-day trading on Monday, falling by Rs1.60 in the interbank foreign exchange market.
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KARACHI: The State Bank of Pakistan (SBP) has issued Rs360 billion worth fresh currency notes on the occasion of Eid-ul-Fitr, said a statement on Monday.
The SBP said that through 16 field offices of its subsidiary SBP-Banking Services Corporation (SBP-BSC), provided fresh banknotes of various denominations aggregating to Rs360 billion, including Rs61 billion of Rs100 and below denominations, via cash counters of banks and SMS service (8877) to general public during Ramazan.
Out of Rs61 billion, Rs54 billion were issued through the SMS service which was available in 142 cities through more than 1,700 commercial bank branches and 16 field offices of SBP BSC.
The service catered to more than 3 million people before Eid-ul-Fitr.
State Bank has also issued a sufficient quantity of fresh notes of higher denominations to banks for smooth ATM operations during the Eid Holidays.
In this regard, special teams of SBP and SBP BSC officials shall inspect and monitor the working of ATMs across Pakistan to ensure uninterrupted availability of cash to the general public during the Eid holidays.
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