KARACHI: Habib Bank Limited (HBL) has paid monetary penalty of Rs42.2 million to State Bank of Pakistan (SBP) for violation of various regulatory provisions.
According to HBL it paid Rs42.2 million during first quarter (January – March) of 2021 against penalties imposed by the SBP. The bank had paid around Rs231.6 million as monetary penalties to SBP in the same quarter of the last year.
A total amount of Rs42.23 million was paid by the bank as penalties, including those imposed by other regulatory bodies. The bank had paid around 232.19 million as total penalty for the same quarter of the last year.
The bank had paid an amount of Rs320.79 million as penalty for various regulatory violations during the year ended December 31, 2020.
For the year ended December 31, 2020, the bank paid the amount of Rs320.79 million as penalties for violation of various regulations.
However, the payment of penal amount reduced by 33 percent when compared with Rs480.56 million paid in the preceding year.
The bank paid an amount of Rs296 million against fine imposed by the SBP for the year ended December 31, 2020. The latest amount of monetary penalty has been reduced when compared with Rs476 million that was imposed by the SBP on the bank during the preceding year.
KARACHI: The influx of foreign direct investment (FDI) into Pakistan has plummeted by 35 percent during the first nine months (July – March) of the fiscal year 2020/2021, as per data released by the State Bank of Pakistan (SBP) on Monday.
KARACHI: State Bank of Pakistan (SBP) on Monday issued mechanism for payment of markup subsidy for housing finance and issued instructions to banks and development financial institutions (DFIs) for the facility.
The SBP advised banks to submit their claims to Development Finance Support Department (DFSD), SBP BSC, Karachi as per instructions contained in the attached payment mechanism within 15 working days from the end of each Quarter.
However, the banks shall submit their claim within 15 working days for the quarter ending December 2020 and March 2021 from the date of issuance of this circular.
According to markup subsidy payment mechanism (MSPM), the SBP said that the government had issued markup subsidy scheme to provide concessional housing finance for promoting home ownership.
The SBP issued necessary instructions to all commercial banks, microfinance banks and HBFCL through a circular no. 03 dated March 25, 2021 and revised instructions issued from time to time.
All loans disbursed under the scheme shall be reported to SBP under housing finance.
Under the Scheme, loans are segregated into four tiers:
i. Tier 0 (T0) – (a) House up to125 sq yds (5 Marla) and (b) flat/apartment with maximum covered area of 1,250 sq ft.
ii. Tier 1 (T1) – (a) House up to125 sq yds(5 Marla) with maximum covered area of 850 sq ft and (b) Flat/apartment with maximum covered area of 850 sq ft.
iii. Tier 2 (T2) – (a) House up to125 sq yds (5 Marla) and (b) flat/apartment with maximum covered area of 1,250 sq ft.
iv. Tier 3 (T3) – (a) House up to250 sq yds (10 Marla) and (b) flat/apartment with maximum covered area of 2,000 sq ft.
Pricing for Housing Loans
Loan Tiers
Customer Pricing
Bank Pricing
Tier 0
5% for first 5 years & 7% for next 5 years
1 Year KIBOR + 700 BPS
Tier 1
3% for first 5 years & 5% for next 5 years
1 Year KIBOR + 250 BPS
Tier 2
5% for first 5 years & 7% for next 5 years
1 Year KIBOR + 400 BPS (Spread may vary)
Tier 3
7% for first 5 years & 9% for next 5 years
1 Year KIBOR + 400 BPS (Spread may vary)
For loan tenors exceeding 10 years, market rate i.e. bank pricing will be applicable for the period exceeding 10 years.
Procedure for loans disbursements and availing markup subsidy:
EAs shall evaluate financing applications of customers as per parameters of Markup Subsidy Scheme for Housing Finance approved by the Federal Cabinet and circulated by the State Bank of Pakistan to all banks/DFIs vide IH&SMEFD Circular No. 03 dated March 25, 2021 and revised from time to time. The financing facility for a borrower shall be sanctioned and disbursed by the EA after completion of documentation formalities. These financing shall be entitled for markup subsidy as prescribed above. No further evaluation on eligibility of borrowers would be conducted by the State Bank of Pakistan.
Calculation of Equally Monthly Installment (EMI) for Borrower
For first five years EMI, amortization schedule would be prepared for full tenor of financing at markup rate i.e. 3 percent, 5 percent or 7 percent depending upon the financing tier.
EMI for next five years i.e. 6th year to 10th year would be on the basis of amortization schedule prepared at the applicable subsidized markup rate (i.e. 5 percent, 7 percent or 9 percent depending upon the financing tier) on outstanding principal for remaining financing tenor.
After 10th year of financing, EMI would be calculated on the basis of amortization schedule at applicable markup rate.
Calculation of Markup Subsidy for Banks
After calculating the EMI for end user, the EAs will calculate the difference to be paid by Government of Pakistan by applying the difference between 1-Year KIBOR + spread and end user markup rate on the outstanding principal.
The banks will calculate the subsidy for the period of markup subsidy i.e. 10 years.
Mechanism for Payment of Markup Subsidies: Payment of subsidy to EAs will be made through SBP’s operational arm viz. Development Finance Support Department (DFSD), SBP BSC, Head Office, Karachi.
The executing agencies (EAs) / banks shall prepare and submit claims on quarterly basis to DFSD for receiving government markup subsidy on outstanding principal amount of their performing housing finance portfolio up to expiry of each individual loan. In case of a loan becoming non-performing, no markup subsidy will be paid after being classified as ‘Loss’ as per SBP PRs for Housing Finance. The EAs claims shall contain particulars of each individual loan along with calculations of subsidy based on relevant 1-year KIBOR used. For the sake of simplicity, EAs shall assign unique number to each loan i.e. “Bank Name—Loan Number” (ABC-12345678). The markup subsidy claim should be duly vetted by internal audit department of the EA. The audited claim along with a certificate from EA relating to eligibility of borrowers for the subject scheme and correctness of the subsidy amount shall be submitted to DFSD within 15 working days after the end of respective quarter for payment of subsidy. The claims shall be submitted to DFSD as per the format attached as Annexure B (Annexure B-1 for Banks/DFIs and Annexure B-2 for MFBS).
DFSD, SBP BSC shall scrutinize subsidy claim of EAs within 15 working days after receipt of complete information from EAs. DFSD shall ascertain that calculations of EAs subsidy claim are correct and applicable KIBOR has been used by the EAs. Thereafter, DFSD shall submit scrutinized claims to Accounts Department, SBP BSC for release of funds, through Karachi Office, to respective EA account maintained with SBP BSC, Karachi from Government account ‘Non-Food Account 1’.
Banking Inspection Department of State Bank during regular inspection of the EAs shall conduct inspection of their housing finance portfolio on sampling basis using its own sampling techniques. SBP inspectors shall randomly select credit files and review them from the perspective of eligibility of borrowers under the Program, status of loan (regular or NPL) and GOP subsidy claim. The BID inspection report section on ‘Markup Subsidy on Housing Finance’ shall be used as an important input for reviewing the Scheme and assessing its effectiveness in fulfilling the Government objective of promoting home ownership in the country.
KARACHI: The foreign exchange reserves of the country have increased by $2.54 billion to $23.22 billion by week ended April 09, 2021, State Bank of Pakistan (SBP) said on Thursday.
The foreign exchange reserves of the country were at $20.679 billion by week ended April 02, 2021.
The official foreign exchange reserves of the State Bank increased by $2.579 billion to $16.106 billion by week ended April 09, 2021 as compared with $13.527 billion a week ago.
The increase in reserves has been attributed to receipt of proceeds of $2.5 billion against issuance of Pakistan Euro Bonds.
The foreign exchange reserves held by commercial banks eased by $38 million to $7.114 billion by week ended April 09, 2021 as compared with $7.152 billion a week ago.
KARACHI: State Bank of Pakistan (SBP) has issued instructions for opening accounts for raising funds through donations / contributions for Prime Minister’s Ehsaas Koye Bhooka Na Soye initiative.
The SBP said that the Finance Division, Government of Pakistan, had notified establishment of the subject Fund under the Prime Minister’s Ehsaas Koye Bhooka Na Soye initiative, to eliminate hunger in the country by providing meals to the people in need, especially those at risk of, or experiencing hunger.
In this regard, the State Bank of Pakistan (SBP) is pleased to announce opening of “Ehsaas: Koye Bhooka Na Soye (EKBNS) Fund Account-2021”, for raising funds through donations/contributions from general public to support the above initiative. All the commercial banks and field office of SBP Banking Services Corporation shall open the account of the Fund and shall receive donations/contributions in cash, through cheques, and through Alternate Delivery Channels (ADCs), at all their branches across the country.
Donors shall be provided multiple options for making donation/contribution to the Fund as described below:-
a. Counters of the banks
All commercial banks in Pakistan and field offices of SBP Banking Services Corporation shall collect donations at their counters across their branch network in Pakistan. The donors may deposit their donations at any branch of the above banks. The daily donation/contribution collected by the commercial shall be settled on aggregate basis with the SBP, through Pakistan Real-time Settlement System (PRISM) via MT-103.
b. Crossed Cheques Drop Box Facility
Due to COVID-19 pandemic situation, banks shall also make available at their branches, the drop box facility enabling the donors to drop crossed cheques in the name of the fund. The banks shall, accordingly debit the customer’s account and transfer the proceeds to the Fund’s account at SBP through PRISM. The banks are advised to ensure that the drop box facility is fully operational and prominent notices or banners are placed in all such branches that the donors can drop the crossed cheques in the name of the Fund.
c. Alternate Delivery Channels ( ADCs)
The banks shall allow their respective customers to make donations/contributions through internet banking, Automatic Teller Machines (ATM) and other Alternate Delivery Channels (ADC). For the purpose, commercial banks shall prominently display the IBAN of the Fund at their websites and ATMs screens and send the same to their clients through SMS alerts. The amount collected through ADCs shall be settled with SBP through PRISM on aggregate basis, once in a day.
The banks shall keep the detail files of settlement of donations collected through mechanism specified in a, b and c above (i.e. name of donor and amount of his/her donation/contribution) in their record for subsequent verification and reference.
KARACHI: The National Assembly likely to adopt amendments to State Bank of Pakistan (SBP) Act by September 2021.
This was assured by the Pakistani authorities to International Monetary Fund (IMF).
The ministry of finance submitted the amendments to parliament in March 2021 and the authorities expect adoption by parliament by end-September 2021.
The authorities assured the IMF about making good progress toward strengthening the SBP’s autonomy, governance, and mandate.
The authorities said: “We have worked closely with IMF staff in the preparation of amendments to the SBP Act to address existing gaps.”
The amendments aim to:
(i) establish domestic price stability as the primary objective, with financial stability and growth as secondary objectives;
(ii) clearly define the SBP’s functions to help achieve these objectives;
(iii) strengthen the SBP’s financial autonomy, including through statutory mechanisms for sufficient recapitalization and profit retention; (iv) prohibit the extension of direct credits or guarantees to the general government;
(v) establish the statutory underpinnings for audits;
(vi) secure stronger protection of the personal autonomy of senior officials;
(vii) further strengthen collegial decision making at the executive management level;
(viii) provide stronger oversight by the Board; and
(ix) improve SBP’s accountability regarding the conduct of its monetary policy and the achievement of its objectives.
KARACHI: The State Bank of Pakistan (SBP) on Monday issued bank office and business hours during Ramazan-ul-Mubarak 1442 A. H..
The SBP said that the SBP will observe the following office hours during the month of Ramazan-ul-Mubarak, which will also be followed by all bank, Development Financial Institutions and Microfinance Banks.
The bank office timings shall be 10:00 am to 4:00 pm (with prayer break from 2:00 pm to 2:15 pm) during Monday to Thursday.
On Fridays the bank office shall be from 10:00 am to 1:00 pm (without break).
The banking hours for public dealings shall be:
The banks shall observe banking hours from Monday to Thursday between 10:00am to 1:30 pm (without break). The banking hours on Friday shall be from 10:00 am to 1:00 pm (without break).
However, except Friday, banks / MFBs may observe extended business (banking) hours for public dealing from 10:00 a.m. to 3:00 p.m. (with 15 minutes prayer break) at their branches situated in major cities / business centers / commercial markets & hubs / ports etc.
KARACHI: Dr. Reza Baqir, Governor, State Bank of Pakistan (SBP) has highlighted measures taken by the central bank to boost the debt and capital markets of the country.
He was addressing at the Gong Ceremony to mark the beginning of a new chapter of cooperation between SBP and Pakistan Stock Exchange (PSX) on multiple initiatives.
SBP and PSX have recently been working closely to improve and widen the access of capital market participants to government debt securities; facilitate investments by non-residents in the stock exchange; remove bottlenecks hindering companies from leveraging against shares of their group companies; and, developing information sharing arrangements between banks and capital markets.
Speaking on the occasion, Governor SBP, Dr. Reza Baqir said he was pleased to visit PSX for this Gong ceremony as it marked the commitment of SBP and PSX to work together for the deepening of debt and capital markets in Pakistan and improving financial intermediation. He made three important announcements in this regard.
First, he said that SBP has revised the Rules governing appointment of primary dealers for the Government’s debt securities. This will expand the list of institutions eligible to work as primary dealers, including Security Depositories and Clearing institutions. This measure is aimed at widening the investor base of government securities, improving liquidity, enhancing transparency and promoting market development. In addition, SBP has relaxed the selection and performance criteria for development finance institutions (DFIs), investment banks and brokerage houses to encourage them to become part of the primary dealer system, which is currently dominated by banks. Hence, among other privileges offered to primary dealers, a larger and more diverse group of institutions will now have direct access to primary auctions.
He said that while the government debt market in Pakistan is well developed and liquid, participation of capital market clients has historically been limited and SBP wants to encourage wider ownership of Government securities among retail investors. The Governor SBP noted that the revised primary dealer Rules will cater to the needs of a diverse group of investors, including capital market clients, corporates and individuals, and will attract a new clientele to the government securities market. Governor Baqir shared that this measure has been taken after detailed discussions with stakeholders and a comprehensive review of international best practices.
Second, Governor Baqir said that SBP has made changes in its prudential regulations to facilitate the sponsors, shareholders and companies in raising more financing against the security of shares of their group companies. He highlighted that this amendment will help sponsors and companies in raising liquidity for further investment in new business opportunities and ventures, in turn leading to greater economic activity. This regulatory change would also benefit the capital markets by encouraging sponsors of companies to consider listing on the stock exchanges. As a result, it will also promote documentation of the economy, transparency, and good corporate governance practices.
Third, Dr. Baqir, apprised the audience that SBP and PSX are jointly working on expanding the scope of KYC information sharing arrangements between banks and Central Depository Company of Pakistan (CDC) or National Clearing Company of Pakistan Limited (NCCPL) for existing bank account holders. He was delighted to reveal that the tangible progress has been made and was hopeful that this important initiative will be successfully rolled out by the end of the next month. He further added that such arrangements will facilitate capital market players in mobilizing domestic resources and channeling them effectively to productive uses.
The Governor SBP was warmly welcomed by the Chairman of the Board, PSX, Mr. Sulaiman S. Mehdi; Board Members of PSX; MD & CEO of PSX, Mr. Farrukh Khan; and senior management of PSX. Also present at the Gong Ceremony were senior members of the Market, Bank Presidents and Treasury Heads, along with senior management of SBP.
Welcoming the SBP Governor to PSX, the MD PSX, Farrukh Khan, said that he was confident that the visit of Governor Reza Baqir to Pakistan Stock Exchange will mark the beginning of a new collaborative journey dedicated to greater coordination between PSX as the frontline regulator of the capital market and SBP as the regulator for the banking industry in the country. This greater coordination would help to promote and foster an environment of increased activity in terms of online initiatives, the recently launched Roshan Digital Accounts for Overseas Pakistanis, and Government Debt Securities, amongst other segments. He further stated that the journey of added cooperation and between PSX and SBP will benefit all stakeholders of the capital market, the banking industry and the economy of Pakistan. He expressed confidence that SBP and PSX will together be able to lay a pathway for facilitating greater online participation in terms of account opening and activity by brokers and investors, as well as for increasing the number of investors investing in different asset classesin the capital market of Pakistan.
KARACHI: Banks shall remain closed on the first day of Ramaza-ul-Mubarak 1442 A. H. for deduction of Zakat.
The Stat Bank of Pakistan (SBP) in a notification issued on Monday said that SBP will remain closed for public dealing on 1st Ramadan-ul-Mubarak, 1442 A.H., which shall be observed as “Bank Holiday” for the purpose of deduction of Zakat.
All banks / DFIs / MFBs shall, therefore, remain closed for public dealing on 1st Ramadan-ul-Mubarak, 1442 A.H. However, all employees of the banks / DFIs / MFBs will attend to their official assignments (in-office or work-from-home, as designated under the current COVID-19 situation) on Bank Holiday treating it as a normal working day (except for public dealing).
KARACHI: The inflow of workers’ remittances has registered 26 percent growth to $21.47 billion during first nine months (July – March) 2020/2021, State Bank of Pakistan (SBP) said on Monday.
The inflow of remittances was $17 billion during the same period of the last fiscal year.
The SBP said that workers’ remittances extended their unprecedented streak of above $2 billion for the 10th consecutive month in March 2021.
Remittances rose to $2.7 billion in March 2021, 20 percent higher than last month and 43 percent higher than March 2020.
Cumulatively during July-Mar FY 21, remittances have risen to $21.5 billion, up by 26 percent over the same period of FY20.
Remittance inflows during Jul-Mar FY21 were mainly sourced from Saudi Arabia ($5.7 billion), United Arab Emirates ($4.5 billion), United Kingdom ($2.9 billion) and the United States ($1.9 billion).
Proactive policy measures by the Government and SBP to encourage more inflows through formal channels, limited cross border travel in the face of the COVID-19, medical expenses and altruistic transfers to Pakistan amidst the pandemic, and orderly foreign exchange market conditions are continuing to contribute to this sustained rise in workers’ remittances.
