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 Pakistani rupee remained stable against the US dollar on Wednesday, as the interbank foreign exchange market witnessed range-bound trading with limited volatility, according to currency dealers.
(more…)
KARACHI: State Bank of Pakistan (SBP) has imposed monetary penalty to the tune of Rs1.35 billion on commercial banks in five months for violating regulatory environment.
The central bank on Wednesday issued significant enforcement measures by imposing monetary penalty on banks for violating rules, regulations and other regulatory environment.
The SBP imposed Rs192.66 million as penalty on four banks during the month of November 2019 for violating mainly regulations related to Customers Due Diligence (CDD) and Know Your Customer (KYC).
The SBP from July 2019 started public disclosure of penal action against banks. “Enforcement actions are an integral part of regulatory regime which involves imposition of monetary penalties and other actions against institutions and individuals for violations of laws, rules, regulations, guidelines or directives issued by SBP from time to time,” according to a circular issued by the central bank.
In order to bring more transparency and strengthen market discipline, SBP has decided to publicly disclose significant enforcement actions
With the latest penal action the total amount of penalty during first five months (July – November) 2019 increased to Rs1,351.28 million.
According to the highlights of significant enforcement actions by the SBP during November 2019, the central bank imposed Rs192 million as monetary penalties.
The central bank on November 05, 2019 imposed penalty amount of Rs60.8 million on Allied Bank Limited for violating CDD/KYC.
“In addition to penal action, the bank has been advised to conduct an internal inquiry on breaches of regulatory requirements and take a disciplinary action against the delinquent officials,” the SBP said.
The central bank o n November 06, 2019 imposed an amount of Rs91.85 million on MCB Bank Limited for violating CDD/KYC.
“In addition to penal action, the bank has been advised to conduct an internal inquiry on certain breaches/violation of regulatory requirements. Further, the bank has been advised to strengthen its process related to KYC/CDD, in order to avoid recurrence of such violations in future.”
The SBP on November 06, 2019 imposed penalty of Rs14 million on the Bank of Punjab for violating CDD/KYC.
“In addition to penal action, the bank has been advised to strengthen its process related to KYC/CDD, in order to avoid recurrence of such violations in future.”
The SBP on November 07, 2019 imposed monetary penalty of Rs26 million on Habib Bank Limited for violating CDD/KYC.
“In addition to penal action, the bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such violations in future.”
KARACHI: Habib Bank Limited (HBL) has planned to expand its network in China, according to corporate briefing on Tuesday.
According to Topline Research, the HBL is planning to expand its network in China. Talks are in advanced stages of giving HBL rep office a branch status, additionally One-Belt One-Road (OBOR) based countries are to be assisted by HBL where Chinese presence is limited.
Key theme for the bank is focused on key real sectors with segments like Agri financing and SME finance.
In 2020 the bank is expected to move away from one off costs and move towards a normalized cost to income ratio with a long term target of sub 50 percent.
Customer base to cross 20 million in the coming year versus 16 million currently, translating into higher fee income going forward.
Current account are targeted to cross the one trillion mark, keeping cost of deposit low.
The banks’ focus is on innovation through technology.
The Bank focuses on “STARS” strategy encompassing:
• Sustaining Success (maintain position in deposits, IB, treasury and rural banking)
• Turnaround (revitalization of international division and home remittance)
• Acceleration (consumer finance)
• Realignment (commercial banking fis and Islamic banking)
• Startups (emphasis on branchless banking and digital banking)
Key Initiatives of the banks are 1) branchless banking through Konnect aimed to capture a new market through smartphones, 2) Power sector prowess through various IB based transactions and 3) Launch of Panda bonds.
Open position secured to pay New York penalty is winding down by 25-30 percent by end of 2019.
KARACHI: The rupee ended flat against dollar on Tuesday owing to demand from import and corporate buyers.
The rupee ended Rs154.98 to the dollar from previous day’s closing of Rs154.97 in interbank foreign exchange market.
Currency dealers said that the market witnessed demand from importers and corporate buyers for dollars. However, inflows offset the demand and the rupee depreciated by one paisa.
The foreign currency market was initiated in the range of Rs155.00 and Rs155.04. The market recorded day high of Rs155.00 and low of Rs154.95 and closed at Rs154.98.
The exchange rate in open market witnessed appreciation of rupee by 10 paisas against dollar. The buying and selling of dollar was recorded at Rs154.50/Rs154.80 from previous day’s closing of Rs154.60/Rs154.90 in cash ready market.
KARACHI: The Pak Rupee maintained gain against dollar and appreciated by 10 paisas on Monday owing to improved economic indicators.
The rupee ended Rs154.97 to the dollar from last Friday’s closing of Rs155.07 in interbank foreign exchange market.
The currency experts said that the rupee continued gain and reached to below Rs155 to the dollar after six months. They said that export receipts and inflows of home remittances remained helped the rupee to make gain.
The foreign currency market was initiated in the range of Rs154.95 and Rs155.05. The market recorded day high of Rs155.02 and low at Rs154.95 and closed at Rs154.97.
The exchange rate in open market also witnessed appreciation of the rupee. The buying and selling of dollar Rs154.60/Rs154.90 as compared closing of last Friday’s Rs154.80/Rs155.10.
KARACHI: State Bank of Pakistan (SBP) on Friday made attractive the inflow of home remittances through formal channels and announced incentives for banks.
(more…)KARACHI: The Pak Rupee made gain against dollar for the fourth consecutive day on Friday owing to improved inflows.
The rupee ended Rs155.07 to the dollar from previous day’s closing of Rs155.10 in interbank foreign exchange market.
Currency experts said that the sentiments in the market were remained positive owing to news of inflows of 190 million UK Pounds and more expected from National Crime Agency of the UK.
The foreign currency market was initiated in the range of Rs155.02 and Rs155.17. The market recorded day high of Rs155.08 and low of Rs155.06 and closed at Rs155.07.
The rupee maintained a continuous gain after falling to Rs155.34 on December 02, 2019.
The exchange rate in open market witnessed unchanged value in rupee. The buying and selling of dollar was recorded at Rs154.80/Rs155.10, the same previous day’s closing, in cash ready market.
KARACHI: The State Bank of Pakistan (SBP) on Thursday directed banks to prepared a comprehensive depositor-wise database/ Management Information System.
A key element of the information system is its capacity to calculate, on any given date, total liability of a bank towards each of its depositors including any interest/ profit accrued on such deposits and generate a report referred as “Single Depositor View (SDV)”.
This would enable Deposit Protection Corporation (DPC) of the central bank to assess the amounts payable to protected depositors and making payout in case of a bank’s failure.
In order to achieve banking industry-wide standardization of SDV report, a standard format of the report has been developed by the DPC.
Furthermore, with a view to facilitate banks in understanding the fields of report and reporting requirements, a document titled “Explanatory Notes on Single Depositor View (SDV) Data” has also been prepared.
The explanatory notes provide explanation of various terms used for SDV data compilation together with clarity on classification of depositors, and balance calculations for protected depositors.
Considering the distinct nature of SDV concept, the banks have been accorded the extension in deadline for the development of information system/ database, as referred in para 10 of DPC Circular No. 01 of 2019, until January 31, 2020.
In this regard, banks are advised to provide a progress report on development of their information system by December 31, 2019.
Going forward, DPC shall assess the system’s readiness and efficacy through SBP-inspection teams or by its designated staff for the purpose.
The member banks are also required to submit first such report of the position of depositors, as per formats as of December 31, 2019 by February 15, 2020 and then onwards on quarterly basis.
DPC had issued Circular No. 01 of 2019 dated March 15, 2019 on ‘Information System for Protected Depositors of Member Banks’ where all member banks were required to appropriately install or update their systems including software(s)/ database(s) for maintaining a comprehensive depositor-wise database. Such a database is required to identify, on any given date, all accounts of any single depositor and calculate the total liability of a bank towards that depositor (including any interest/ profit accrued till the given date) referred as “Single Depositor View (SDV)”.
The SBP said that at present, multiple core banking systems are available across banks with each bank relying on a specific system having its own data structure and alignment of different information fields.
Therefore, it is felt necessary that instructions on development of aforesaid Information System should be supplemented with a standardized format having specific arrangement of data fields for compliance by banks to assess total liability of a bank towards a single depositor.
In absence of such a format and prescribed data fields, there is a possibility that the banks would end up producing SDV data on different non-comparable formats.
Hence, DPC has decided to issue a Standardized Report Format (SRF) to enable banks to compile SDV data as per requirements of reimbursement.
The SRF contains 44 data fields relevant to information on eligible depositors of a bank and available at Annexure A. All banks are required to follow the taxonomy of SRF to maintain consistency in SDV data reporting across banks.
The document also explains various terms used in SDV data compilation along with classification guidelines, reporting timelines, medium of reporting and examples on balance calculations.
The Pakistani rupee strengthened against the US dollar for the third consecutive day on Thursday, driven by improved foreign currency inflows in the form of export proceeds and workers’ remittances.
(more…)
KARACHI: Following the improved outlook of Pakistan economy, Moody’s Investors Service on Thursday affirmed the B3 long-term local currency deposit ratings of five top Pakistani banks and changed the outlook to stable from negative.
The rating agency in a statement said that affected banks include Allied Bank Limited (ABL), Habib Bank Ltd. (HBL), MCB Bank Limited (MCB), National Bank of Pakistan (NBP) and United Bank Ltd. (UBL).
The rating actions follow Moody’s decision on 2 December to affirm the B3 rating for the Government of Pakistan and change the outlook on the sovereign rating to stable from negative.
The banks’ rating actions reflect improvements in the operating environment in Pakistan and in the country’s sovereign credit profile, which affect the banks’ given (1) their high government exposures that link their credit profiles to that of the government; and (2) the expectation that the government’s capacity to support banks in case of need will not deteriorate.
The primary driver of Moody’s decision to change the five Pakistan banks’ outlooks to stable is the extensive interconnectedness between their balance sheets and sovereign credit risk, owing to the banks’ high exposures to government securities.
According to Moody’s estimates as of the latest available information, the five banks’ direct exposure to government credit risk stood at around 10.2x of Tier-1 capital for ABL, 8.1x for HBL, 6.4x for MCB, 9.5x for NBP and 6.8x for UBL.
The high direct exposure to government credit risk, in addition to the primarily Pakistan focus of their operations, links the banks’ credit profile to that of the government. As a result, the improvements in the operating environment and in the sovereign credit profile have eased pressures on banks as well.
The stable outlook assigned to the banks’ local currency deposit ratings also reflects Moody’s expectation that the government’s capacity to support banks in case of need will not deteriorate.
This is reflected by the stable outlook on Pakistan’s sovereign B3 bond rating which is driven by reduced external vulnerability risks on the back of policy adjustments and currency flexibility, as well as ongoing fiscal reforms that will mitigate risks related to debt sustainability and government liquidity.
The local currency deposit ratings of NBP and HBL incorporate one notch of support uplift from their caa1 baseline credit assessments.
Moody’s decision to affirm the banks’ ratings reflects their stable deposit-based funding structures, high liquidity buffers and good earnings generating capacity, as well as Pakistan’s high growth potential.
These credit strengths balance banks’ modest capital buffers and high asset risks, as well as their high exposure to the government, which links their credit profile to that of the government.
Moody’s does not have any particular environmental, social or governance concern for the banks included in this action, and does not apply any corporate behavior adjustments to them.