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  • FSC reserves judgment in Riba free banking case

    FSC reserves judgment in Riba free banking case

    ISLAMABAD: The full bench of Federal Shariat Court has reserved judgment in case of Riba free Islamic banking system in Pakistan, according to a statement issued on Tuesday.

    The full bench of the Court comprising of Justice Muhammad Noor Meskanzai Chief Justice, Justice Dr. Syed Muhammad Anwar and Justice Khadim Hussain M. Shaikh, in exercise of power under Article 203-D of the Constitution of Islamic Republic of Pakistan continued hearing of the Riba case and reserved for judgment.

    READ MORE: Riba case adjourned to April 04

    It is pertinent to mention that Riba case was remanded by Shariath Appellate Bench Supreme Court of Pakistan in 2002.

    The existing bench of the Federal Shariat Court headed by the chief Justice Justice Muhammad Noor Meskanzai took keen and unprecedented interest in this matter.

    During the chairmanship of his lordship of the bench thirty four hearings are conducted.

    READ MORE: Court hearing on Riba-free banking in Pakistan

    Petitioners, their counsels, jurisconsults, Amicus Curiae, Economists, Experts, scholars, chartered accountants, Attorney General, and Advocate Generals advanced their arguments and the Court heard them with patience.

    They also gave suggestions for conversion of the existing banking system into Riba free Islamic Banking system.

    The State Bank of Pakistan (SBP) defines Riba as:

    READ MORE: PMRC, HBL Islamic Banking raise Rs1bn Sukuk

    The word “Riba” means excess, increase or addition, which correctly interpreted according to Shariah terminology, implies any excess compensation without due consideration (consideration does not include time value of money). This definition of Riba is derived from the Quran and is unanimously accepted by all Islamic scholars.

    The meaning of Riba has been clarified in the following verses of Quran (Surah Al Baqarah 2:278-9)

    “O those who believe; fear Allah and give up what still remains of the Riba if you are believers. But if you do not do so, then be warned of war from Allah and His Messenger. If you repent even now, you have the right of the return of your principal; neither will you do wrong nor will you be wronged.”

    READ MORE: SBP issues five-year strategic plan for growth of Islamic banking

    “The origination of term interest dates back to 17th century with the emergence of banking system at global level. Interest means giving and/or taking of any excess amount in exchange of a loan or on debt. Hence, it carries the same meaning/value as that of Riba as defined in the previous question. Further, it is narrated that “the loan that draws interest is Riba”.

    There is consensus among the Muslim scholars of all the fiqhs that interest is Riba in all its forms and manifestations.

  • SBP’s customer exchange rates – April 12, 2022

    SBP’s customer exchange rates – April 12, 2022

    KARACHI, April 12, 2022 – The State Bank of Pakistan (SBP) has issued the official exchange rates for customers on Tuesday, April 12, 2022.

    (more…)
  • SBP issues KIBOR rates – April 11, 2022

    SBP issues KIBOR rates – April 11, 2022

    KARACHI: State Bank of Pakistan (SBP) on Monday issued the Karachi Interbank Offered Rates (KIBOR) as on April 11, 2022.

    Following are the latest KIBOR rates:

     TenorBIDOFFER
    1 – Week12.2212.72
    2 – Week12.2512.75
    1 – Month12.2812.78
    3 – Month12.3812.63
    6 – Month12.8013.05
    9 – Month12.8413.34
    1 – Year12.8913.39

    Source: State Bank of Pakistan

    SBP issues KIBOR rates – April 08, 2022
  • SBP’s customer exchange rates – April 11, 2022

    SBP’s customer exchange rates – April 11, 2022

    KARACHI, April 11, 2022 – The State Bank of Pakistan (SBP) has released the official exchange rates for customers on Monday, April 11, 2022.

    (more…)
  • SBP issues KIBOR rates – April 08, 2022

    SBP issues KIBOR rates – April 08, 2022

    KARACHI: State Bank of Pakistan (SBP) on Friday issued the Karachi Interbank Offered Rates (KIBOR) as on April 08, 2022.

    Following are the latest KIBOR rates:

     TenorBIDOFFER
    1 – Week12.1912.69
    2 – Week12.2212.72
    1 – Month12.2412.74
    3 – Month12.3912.64
    6 – Month12.9313.18
    9 – Month12.9613.46
    1 – Year13.0113.51

    Source: State Bank of Pakistan

    SBP issues KIBOR rates – April 07, 2022
  • SBP’s customer exchange rates – April 08, 2022

    SBP’s customer exchange rates – April 08, 2022

    KARACHI, April 08, 2022 – The State Bank of Pakistan (SBP) has issued the official exchange rates for customers on Friday, April 08, 2022.

    (more…)
  • SBP raises mark-up rate for export financing scheme

    SBP raises mark-up rate for export financing scheme

    KARACHI: The State Bank of Pakistan (SBP) on Thursday increased mark-up rate for refinancing under Export Financing Scheme (EFS).

    The SBP increased the rate of mark-up for export financing scheme following sharp jump in key policy rate by 250 basis points to 12.25 per cent.

    READ MORE: SBP issues list to impose 100% cash margin on import

    “It has been decided to increase the markup rate for financing under Export Finance Scheme (EFS) by 2.5 per cent in line with the increase in policy rate announced in the MPC meeting today (April 07, 2022),” the SBP said.

    Accordingly, the markup for Export Finance Scheme (both Part I and Part II) will be 5.5 per cent per annum with effect from April 08, 2022 till further instructions.

    Banks’ spread for corporate borrowers and SME borrowers will remain unchanged i.e. 1 per cent & 2 per cent, respectively.

    READ MORE: SBP allows commission payment to foreign brokers

    This revision in rates will not be applicable on financing under Rupee-based discounting facility of EFS, the SBP added.

    Earlier in the day, the Monetary Policy Committee (MPC) of the SBP in its emergent meeting decided to raise the key policy rate to 12.25 per cent from 9.75 per cent.

    The MPC noted that the latest developments necessitated a strong and proactive policy response. “Accordingly, the MPC decided at its emergency meeting today, to raise the policy rate by 250 basis points to 12.25 percent.”

    READ MORE: SBP increases policy rate sharply by 250bps to 12.25%

    This increases forward-looking real interest rates (defined as the policy rate less expected inflation) to mildly positive territory.

    The MPC was of the view that this action would help to safeguard external and price stability.

    The MPC also noted that SBP is in the process of taking further actions to reduce pressures on inflation and the current account, namely an increase in the interest rate on the export refinance scheme (EFS) and widening the set of import items subject to cash margin requirements.

    These items are mostly finished goods including luxury items and exclude raw materials.

    READ MORE: SBP receives 20 applications for digital bank licenses

  • SBP issues list to impose 100% cash margin on import

    SBP issues list to impose 100% cash margin on import

    KARACHI: The State Bank of Pakistan (SBP) on Thursday issued a list of 177 items for imposing 100 per cash margin on import with immediate effect.

    In this regard, it has been decided that banks, with immediate effect, shall obtain 100 percent cash margin on the import of items as listed in the enclosed Annexure-A. The cash margins on these specific items will remain in place till December 31, 2022, the central bank said in a circular.

    READ MORE: SBP imposes 100% cash margin on imported items

    The cash margins deposited by importers on all items shall be non-remunerative.

    The SBP further said that to ensure effective monitoring, banks are required to submit details of cash margins, applicable on all items, collected from importers on monthly basis, as per format at Annexure-B.

    Data for ongoing month should be reported to Statistics & Data Ware House Department latest by the 10th of the following month.

    Further, monthly data for the period September 2020 to March 2022 is required to be submitted on the same format latest by June 30, 2022.

  • SBP allows commission payment to foreign brokers

    SBP allows commission payment to foreign brokers

    KARACHI: The State Bank of Pakistan (SBP) on Thursday allowed payment of commission to international broker dealers (IBD) in order facilitate foreign portfolio investment.

    In this regard the central bank issued a circular. The SBP said that it had been decided to allow general permission to banks or Authorized Dealers (ADs) for remitting the share of commission to such IBD by Local Broker Dealers (LBD).

    READ MORE: SBP increases policy rate sharply by 250bps to 12.25%

    To allow the general permission the SBP inserted a new para to Chapter 14 of Foreign Exchange Manual.

    According to new para, Authorized Dealers (ADs) may allow remittance of due share of commission by Local Broker Dealer (LBD) to International Broker Dealers (IBD) against all those settled trades of securities, which have been initiated by IBD for direct execution through LBD, on behalf of their non-resident investors (SCRA holders), subject to compliance of following terms and conditions:

    The LBD shall be a Securities Broker in terms of Securities Brokers (Licensing and Operations) Regulations of Securities and Exchange Commission of Pakistan (SECP).

    READ MORE: SBP receives 20 applications for digital bank licenses

    IBD shall be a foreign entity engaged in the brokerage business that has entered in to an agreement with LBD for sharing of brokerage commission arising from buying/ selling of securities in Pakistan on behalf of non-resident clients of IBD.

    The LBD shall submit an application for remittance duly signed by CFO along with an undertaking that amount requested has not been remitted abroad from Pakistan earlier and duly filled Form-M.

    The LBD shall provide a copy of valid underlying contract. The contract shall include name of IBD, applicable rate of commission, periodicity of payment etc.

    READ MORE: Crypto platform appoints Pakistan country manager

    The LBD shall provide the detail of deals, against which commission is being remitted. The detail shall include name of the foreign investor & UIN, IBD Name & No., Custodian/Settlement Bank Name & No., trade (sale/purchase), name and quantity of security, price, commission earned, applicable Taxes and Net share of commission due for remittance, etc. The details should be verified by CFO of the LBD and counter verified by National Clearing Company Pakistan Limited (NCCPL) and Settlement Bank/AD with respective authorized Signatures and Stamp.

    The amount of commission (net of applicable taxes) to be remitted, shall not exceed the amount determined as per rate prescribed by Pakistan Stock Exchange (PSX) or the rate agreed in the agreement, whichever is lower.

    READ MORE: SBP issues bank timing during Ramadan 2022

  • Pakistan’s foreign exchange reserves shrink to $17.48 bn

    Pakistan’s foreign exchange reserves shrink to $17.48 bn

    KARACHI: Pakistan’s foreign exchange reserves have declined to $17.48 billion by week ended April 01, 2022, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country fell by $1077 million to $17.477 billion by week ended April 01, 2022 as compared with $18.554 billion a week ago i.e. March 25, 2022.

    The official reserves of the SBP fell by $728 million to $11.319 billion by week ended April 01, 2022 as compared with $12.047 billion a week ago.

    The central bank said that decline in reserves to debt repayment and government payment pertaining to settlement of an arbitration award related to a mining project.

    The foreign exchange reserves held by commercial banks also recorded a decline of $349 million to $6.158 billion by week ended April 01, 2022 from $6.507 billion a week ago.

    READ MORE: Pakistan’s weekly forex reserves deplete by $2.88 billion