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 announces freight support for sugar export

KARACHI: State Bank of Pakistan (SBP) on Friday said that it will disburse freight support payments to sugar mills in Punjab Province at variable rates to be calculated on daily basis as per prescribed formula.

The rates would be based on white sugar price index published by International Sugar Organization (https://www.isosugar.org/prices.php).

Further, the international sugar price on the date of sugar export quota allocation will be applicable for calculation of rate of freight support irrespective of the export price, the SBP said.

In a circular, the central bank invited attention of banks to EPD Circular Letter No. 22 dated December 18, 2018 regarding export of sugar.

In this regard, ADs may find enclosed letter No. FD(W&M)2-3/2018 dated January 31, 2019 (Annexure-I) received from Finance Department, Government of the Punjab regarding release of funds for freight support on export of sugar subject to terms and conditions mentioned therein.

The SBP advised the banks to process the cases of eligible sugar mills for cash freight support against the export of sugar as per following mechanism:

Banks will forward the shipment-wise requests of sugar mills on prescribed format through their respective Departmental/Business/Group Heads to the Director, FEOD, SBP-BSC, Head Office, Karachi or the Chief Manager, Field Office of SBP-BSC, as the case may be, for claiming freight support quoting the reference of this circular letter along with the attested / authenticated copies of the following documents:

FEOD’s approval letter for allocation of sugar export quota.

Manual Form-E/Electronic Form-E (EFE).

Goods Declaration Form (GDF).

Bill of Lading/ Truck Receipt/ Railway Receipt. In case export has been made through House Bill of Lading, it must be accompanied by relevant Master Bill of Lading.

Commercial / Customs Invoice.

Export Proceeds Realization Certificate and / or Advance Payment Voucher properly showing utilization. Where shipment has been made against Advance Payment, shipping documents must have been submitted by the AD under Para 27, Chapter 12 of F.E Manual – 2018.

Freight support will be paid to sugar mills on first come first served basis. Freight support will be allowed only after full realization of export proceeds against E-Form.

Exporters must ship the sugar within 60 days from the date of FEOD’s approval regarding quota allocation to be eligible for freight support. Both date of approval and date of shipment are included in counting of the 60 days period. For shipment by sea, the date of shipment is the “Shipped on Board” date on Bill of Lading. For shipment by land route, the “Out of Charge” date will be considered as the date of shipment.

It is reiterated that in case of non-performance within the stipulated time against the quota allocated by FEOD, ADs will recover a penalty of 15% of total contract value from the exporter and deposit the same with the FEOD, SBP-BSC, Head Office, Karachi through DD/ PO in favor of Government of Pakistan. In case of partial shipment, the penalty shall be recovered by the AD proportionately. Further, sugar mills/ exporters who are defaulters of banks will not be allowed to export sugar/ paid freight support.

Sugar mills will approach the respective office of SBP-BSC through their AD claiming the freight support within 60 days from realization of export proceeds or date of shipment, whichever comes later. Further, both dates of submission of claim and realization of export proceeds or date of shipment, whichever applicable, will be considered in calculating number of days. No claims will be entertained after aforementioned time period.

SBP-BSC will return discrepant claim to the respective AD and the same must be resubmitted after removing the discrepancies within 30 days from the date of SBP-BSC’s letter (both dates inclusive), after which no such application will be entertained.

Only such sugar mills having presence in Punjab and submitting certificate from the office of Cane Commissioner Punjab at the time of allocation of sugar export quota will be eligible for sugar freight support.

Approved claim will be disbursed to the respective AD in its account maintained with SBP-BSC for onward credit to the exporter’s account within 24 hours of disbursement.

Format of application by the sugar mills (Annexure-II) and the undertaking by AD (Annexure-III) are enclosed.

Incomplete requests shall not be considered, the SBP said.

February 22, 2019
SBP launches three Sharia compliant refinancing schemes for SMEs

KARACHI: State Bank of Pakistan (SBP) has issued three Shariah Compliant Refinance Schemes that are expected to provide level playing field to the Islamic banking industry, a statement said on Friday.

Currently, SBP offers various subsidized refinance facilities to the banks / DFIs to channelise the funds into priority sectors.

It is worth mentioning here that Shariah compliant Islamic Export Refinance facility and Islamic long term financing facility for the exporters are available to the Islamic banking industry.

However, addition of Shariah compliant financing facility for Renewable Energy, financing facility for storage of agricultural produce and Refinance facility for modernization of SMEs will meet the long awaited demand of the industry, especially for the Agriculture and SME sectors.

Mudarabah based facilities would provide long term cheaper liquidity to the end users. The financing under Islamic financing facility for Renewable Energy will be available in two categories.

These are (i)prospective sponsors desirous of setting up renewable energy power projects with capacity ranging between 1 – 50 MW and (ii) consumers willing to install facility using renewable energy source for generation of electricity ranging between 4 KW – 1 MW for own use and/or for supplying to the distribution company.

Islamic Financing facility for storage of agricultural produce will be available for setting up silos, warehouses and cold storages. Refinance facility for modernization of SMEs will be available for purchase of new imported/ local plant & machinery for SMEs.

February 22, 2019
Rupee gains against dollar for third consecutive day

KARACHI: The Pak Rupee gained for the third consecutive day against dollar on Friday owing to shrinking current account deficit and foreign inflows.

The rupee ended with gain of eight paisas to end at Rs138.55 to the dollar as compared with previous day’s closing of Rs138.63 in interbank foreign exchange market.

The rupee maintained gains for the third consecutive day as exchange rate was reached to Rs138.92 to the dollar on February 19, 2019.

Currency experts said that the improved inflows of workers remittances and narrowed current account deficit improved the local currency.

The interbank foreign exchange market was initiated in the range of Rs138.70 and 138.75.

The market recorded day high of Rs138.70 and low of Rs138.52 and closed at Rs138.55.

Pakistan’s current account deficit has narrowed by 16.8 percent to $8.424 billion owing to declining imports and improved foreign remittances.

According to statistics released by State Bank of Pakistan (SBP) on Thursday, the current account deficit narrowed to $8.424 billion during July – January 2018/2019 as compared with the deficit of $10.124 billion in the corresponding period of the last fiscal year.

The exchange rate in open market was remained flat.

The buying and selling of dollar was recorded at Rs138.50/Rs138.90 from previous day’s closing of Rs138.50/139.00 in cash ready market.

February 22, 2019
Rupee advances against dollar in early trade

KARACHI: The Pakistani Rupee (PKR) extended its gains against the US Dollar in early trading on Friday, buoyed by a significant reduction in the country’s current account deficit, according to currency dealers.
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February 22, 2019
Rupee ends with 26 paisas gain to dollar

Karachi, Pakistan – In a welcome development for the Pakistani economy, the national currency, the Pak Rupee, closed with a gain of 26 paisas against the US Dollar on Thursday, driven by a sufficient supply of foreign currency in the market.
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February 21, 2019
Rupee makes significant gain in early trade

KARACHI – The Pakistani Rupee demonstrated a significant gain against the US Dollar in early trade on Thursday, buoyed by a sufficient supply of foreign currency in the market.
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February 21, 2019
Dollar retreats against rupee

In a notable development on Wednesday, the US dollar experienced a decline against the Pakistani Rupee, driven by increased export receipts and foreign inflows, according to market dealers.
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February 20, 2019
US dollar inches up in early trading

The US dollar saw a slight increase against the Pakistani Rupee in early trading on Wednesday, driven by persistent demand for import and corporate payments.
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February 20, 2019
Rupee ends down by 20 paisas against dollar

On Tuesday, the Pakistani Rupee faced a setback, depreciating by 20 paisas against the US Dollar due to increased demand for imports and corporate payments.
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February 19, 2019
SME financing crosses over Rs500 billion: SBP

KARACHI: State Bank of Pakistan (SBP) on Tuesday said that SME financing by banks has first time crossed the milestone of Rs500 billion.

SME financing was recorded at Rs 513 billion at the end of CY 2018 compared to Rs 450 billion in the corresponding period last year, exhibiting growth of 14 percent.

The growth in SME financing was even more prominent in the last six months of CY 2018 (July-Dec, 2018) wherein it registered an increase of 25 percent.

This increase in SME financing attracts greater significance keeping in view the fact that SBP policy rate during CY 2018 witnessed a rising trend.

Due to continued focus of State Bank for facilitating SMEs access to formal sources of finance, SME financing increased significantly during CY 2018.

The substantial increase in SME financing is mainly attributable to implementation of the policy for promotion of SME finance issued by the State Bank of Pakistan in December 2017.

The SME policy ensured provision of enabling regulatory environment for SME finance, prescribing SME financing targets for banks/DFIs, sensitizing banks to adopt SME financing as a viable business proposition, advising banks to provide non-financial advisory services for making SMEs bankable, simplifying procedures for SME financing and introduction of new SBP refinance schemes for SMEs through banks/DFIs.

Under the policy so far more than 2,500 bankers have been trained through focused trainings by the training institute of the central bank.

Similarly, awareness has also been created among more than 20,000 stakeholders including SMEs through special programs held by SBP and SBP BSC all across the country.

The impact of SBP interventions resulted into significant rise in outstanding SME finance by banks/DFIs coupled with 2.3 percent decrease in non-performing SME portfolio of banks over last year.

It is pertinent to mention that Government of Pakistan is also providing all out support to promote SME sector.

The substantial tax incentives to the banks on their incremental financing to SMEs announced in recent economic reforms bill is in line with measures identified in government’s 100-day agenda for development of SME sector.

This will continue to encourage banks to fulfill the financing needs of SMEs.

It is worth mentioning that SME sector is contributing 30 percent towards country’s GDP, employ more than 80 percent of non-agricultural workforce and generate 25 percent in export earnings. Thus, SME sector has huge potential for employment generation and poverty alleviation.

February 19, 2019