KARACHI: Pakistan has successfully received a tranche of $498.7 million under the Extended Fund Facility (EFF) from the International Monetary Fund (IMF), as confirmed by the State Bank of Pakistan (SBP) on Tuesday.
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Banks directed to extend hours for duty, tax collection
KARACHI: State Bank of Pakistan (SBP) on Tuesday directed banks to observe extended banking hours to facilitate collection of duty and taxes.
The SBP said that to facilitate the collection of government receipts/ duties / taxes, it has been decided that the field officers of SBP Banking Services Corporation (SBP-BSC) and authorized branches of National Bank of Pakistan (NBP) will observe extended banking hours till 6:00 PM on March 31, 2021 (Wednesday). For which purpose a special clearing has been arranged at 5:00 P.M. on the same day by the NIFT.
All banks are, therefore, advised to keep their concerned branches open on March 31, 2021 (Wednesday) till such time that is necessary to facilitate the special clearing for Government transactions by the NIFT.
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SBP issues guidelines for processing sugar import at concessionary tax rates
KARACHI: State Bank of Pakistan (SBP) on Monday issued guidelines for banks to process application for import of raw sugar at concessionary tax rates.
The SBP said that the government had allowed 300,000 metric tons of raw sugar to be imported by sugar millers at reduced withholding tax rate.
The central bank further said that the ministry of commerce had issued a public notice in this regard.
To comply with the public notice, the banks should process the requests of the sugar mills for import of raw sugar under the aforementioned Public Notice subject to the following:
Import may be allowed to Sugar mills who have been issued quota by the Ministry of Commerce under the above-mentioned Public Notice;
Import on CFR Free out basis may be allowed as an exception to the instructions given under Para 5 Chapter 13 of the FE Manual;
Advance payment up to 100% of the value of the contract/proforma invoice may be allowed, subject to compliance with other applicable foreign exchange regulations given under Chapter 13 of the FE Manual;
The SBP said that banks shall submit consolidated data of LCs issued and advance payments made, against issued quotas, to Foreign Exchange Operations Department, SBP BSC, Head Office, Karachi on daily basis.
The SBP further directed that banks shall ensure compliance with all other terms & conditions of the Public Notice issued by Ministry of Commerce and bring the above instructions to the knowledge of all their constituents for meticulous compliance. -
SBP signs pact for digitizing government payments
KARACHI: State Bank of Pakistan (SBP) on Monday signed an agreement with Controller General of Accounts Pakistan (CGAP) for digitizing payments of the federal government.
A SBP statements said that through the Memorandum of Understanding (MoU) the federal government payment would be digitized through RAAST
– Pakistan’s First Instant Payment System, launched in January 2021 by SBP.
Raast is a flagship initiative of SBP, which provides simple, fast, low-cost, interoperable and secure electronic payment platform for instant processing of high volume retail payments. Raast also has the ability to make payments to multiple beneficiaries at a time in order to cater high volume government payments like salaries, pension and social security payments.
In the pilot phase, the salaries and pensions of a group of Federal Government employees will be paid through Raast. The payroll and pension-roll data will be shared from CGA system to SBP’s Raast through a highly secured interface, and payments to the beneficiaries’ accounts will be made instantly after validating the beneficiaries’ detail.
To ensure that payments are only credited in the intended beneficiary’s account, Raast verifies the beneficiaries’ details with their banks on real time basis before crediting the payment in beneficiary’s account.
After the pilot run, the facility will be rolled out to cover all the salaries, pension as well as supplier payments of the federal and provincial governments. SBP is also working to use the powerful capacities of Raast to include payments of social security nets such as the Ehsas Program, BISP and other government entities.
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Immunity to SBP officials proposed in legal proceedings
ISLAMABAD: The officials of State Bank of Pakistan (SBP) to be given immunity against any legal suit and prosecution for any act of commission or omission done in exercise of any powers.
According to proposed amendments to the State Bank of Pakistan Act, 1956 issued by the finance ministry on Thursday, “No suit, prosecution or any other legal proceeding including for damages shall lie against the SBP, board of directors of member thereof, governor, deputy governors, member of any board committee and monetary policy committee, officers and employees of the central bank for any act of commission or omission done in exercise or performance of any functions, power or duty conferred or imposed by or under this Act upon such persons or any rules and regulations made thereunder or any legislation administered by the SBP unless such act is done in bad faith and with mala fide intent.”
It is further proposed the governor, deputy governors, directors, members of any board committee and monetary policy committee, officers and employees of the bank shall not be liable in their personal capacity for any act of commission or omission done in their official capacity in good faith and in case of any such proceedings as mentioned in sub-section (1), they shall be indemnified by the bank which shall bear all the expenses thereof, till final decision of the case.
Another immunity proposed to SBP officials, which stated: :”No action, inquiry, investigation or proceedings shall be taken by National Accountability Bureau (NAB), Federal Investigation Agency (FIA) or provincial investigation agency, bureau, authority or institution by whatever name called without prior consent of the board of directors of the SBP.”
Whereas, the present law says: “Every (person in service) of the bank shall be deemed to be a public servant within the meaning of Section of the Pakistan Penal Code.”
The proposed amendments also suggested increasing the tenure of SBP governor to five years from existing three years.
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SBP issues revised mark-up subsidy for low cost house financing
KARACHI: State Bank of Pakistan (SBP) on Thursday issued revised mark up subsidy allowed by the government for low cost housing scheme.
The SBP issued instructions to the banks for implementation of the revised mark up subsidy approved by the government.
In view of the feedback received from various stakeholders, Government of Pakistan (GoP) has decided to revise features of the G-MSS to align it with market dynamics. These revisions aim at significantly enhancing outreach of Scheme to the individuals and households who currently do not own a house.
The key features of the revised G-MSS approved by the GoP are given below:
ParticularsMark up Subsidy Program
Eligibility CriteriaAll men/women holding CNIC First time home owner One individual can have subsidized house loan facility under this scheme only once
Tiers of the SchemeFinancing under Tier 0 is available through microfinance banks for financing of housing units under non-NAPHDA projects. Financing under Tier 1 is available through banks for financing under NAPHDA projects Financing under Tier 2 and Tier 3 is available through banks for financing of housing units under non-NAPHDA projects
Size of Housing Unit
Size of the loan is segregated into four tiers, as under: Tier 0 (T0) – (a) House upto 125 sq yds (5 Marla) and (b) flat/apartment with maximum covered area of 1,250 sq ft. Tier 1 (T1) – (a) House upto 125 sq yds (5 Marla) with maximum covered area of 850 sq ft and (b) Flat/apartment with maximum covered area of 850 sq ft. Tier 2 (T2) – (a) House upto 125 sq yds (5 Marla) and (b) flat/apartment with maximum covered area of 1,250 sq ft. Tier 3 (T3) – (a) House upto 250 sq yds (10 Marla) and (b) flat/apartment with maximum covered area of 2,000 sq ft.
Age of housing units
Newly constructed housing units during last one year from the date of application. However, this requirement will not be applicable till March 31, 2023 under Tier 0, Tier 2 and Tier 3.
Maximum Price of Housing Units
Maximum Price (Market Value) of a single housing unit at the time of approval of financing, as under:
Tier 1 (T1) – Rs 3.5 million
Tier 0 (T0), Tier 2 (T2) and Tier 3 (T3) – No cap
Maximum Loan size
Maximum size of the loan of a single housing unit, as under:
Tier 0 (T0) – Rs 2.0 million
Tier 1 (T1) – Rs 2.7 million
Tier 2 (T2) – Rs 6.0 million
Tier 3 (T3) – Rs 10.0 million
Loan type
Long term housing finance loans
Loan Tenor
Minimum 5 years and maximum 20 years loan tenor, depending upon choice of customers.
Security Requirements
As per banks’credit policy and prudential regulations for housing finance, the housing unit financed will be mortgaged in favor of financing bank.
Allocation in Budget
Finance Division shall give authority to SBP to debit GOP account on quarterly basis for the subsidy payment to banks.
Payment will be made to the banks on submission of quarterly-consolidated subsidy statement as per format prescribed by State Bank.
Pricing
Pricing for Housing Loans: Loan Tiers Customer Pricing Bank Pricing Tier 0 5% for first 5 years &
7% for next 5 years KIBOR+700 BPS Tier 1 3% for first 5 years &
5% for next 5 years KIBOR+250 BPS Tier 2 5% for first 5 years &
7% for next 5 years KIBOR+400 BPS
(Spread may vary) Tier 3 7% for first 5 years &
9% for next 5 years For loan tenors exceeding 10 years, market rate i.e. bank pricing will be applicable for the period exceeding 10 years.
Executing Agency
All commercial banks including Islamic banks, microfinance banks and House Building Finance Company Limited (HBFCL)
Application Form
A standardized Application Form both in English and Urdu will require minimum essential information with simple format.
The processing time will not exceed 30 days after submission of all documents by the borrower and the same will be clearly stated in the application form.
Standardized ProceduresBanks to have standardized loan documents and risk acceptance criteria
Monitoring
SBP will publish consolidated information about the loans extended under this program for information of the public on quarterly basis on its website.
Geographical distributionWhole of Pakistan The revised features are applicable with immediate effect. Accordingly, IH&SMEFD Circular No. 11 of 2020 is hereby superseded. However, instructions notified vide IH&SMEFD Circular No. 01 of 2021 will continue to remain applicable.
The SBP directed the banks to ensure successful implementation of revised G-MSS through dissemination of necessary instructions to branches/ regions, capacity building of field staff, alignment of housing finance products and active marketing campaigns, etc.
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Foreign exchange reserves increase to $20.435 billion
The State Bank of Pakistan (SBP) reported a rise in the country’s liquid foreign exchange reserves, which increased by $276 million to reach $20.435 billion by the week ending March 19, 2021.
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Deposits of Islamic banks grow by 28pc to Rs3.39 trillion
KARACHI: Deposits of Islamic banking institutions have increased by 28 percent to Rs3.39 trillion for the year ended December 31, 2020, the State Bank of Pakistan (SBP) said on Wednesday.
The deposits of the Islamic banks were at Rs2.65 trillion by year ended December 31, 2019.
The market share of Islamic banks in overall banking industry has increased to 18.3 percent by year ended December 31, 2020 as compared with 16.6 percent in the preceding year.
Assets of the Islamic banks also surged by 30 percent to Rs4.27 trillion for the year ended December 31, 2020 as compared with Rs3.28 trillion in the preceding year. Whereas the share of Islamic banks in terms of assets increased to 17 percent by year December 31, 2020 as compared with 14.9 percent a year ago.
The SBP said that during the quarter under review (October-December 2020), the asset base of Islamic Banking Industry (IBI) grew by 12.1 percent (Rs. 461 billion) and reached Rs4,269 billion.
Similarly, the deposits of Islamic banking industry depicted a quarterly growth of 11.7 percent (Rs. 355 billion) and were recorded at Rs. 3,389 billion.
‘Assets’ of IBI witnessed YoY growth of 30 percent, which is the highest growth in asset base since December 2012, whereas ‘deposits’ also registered YoY growth of 27.8 percent, the highest growth since December 2015.
The growth witnessed in the Islamic banking industry shows a promising transition to the new decade even amidst COVID-19 pandemic.
In terms of market share, IBI achieved a significant mark of 17.0 percent and 18.3 percent in assets and deposits respectively, of overall banking industry by end December 2020. Moreover, profit before tax of IBI stood at Rs. 88.4 billion at the end of the December 2020.
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SBP amends regulations to encourage investment in REITs
KARACHI: State Bank of Pakistan (SBP) on Monday amended prudential regulations to encourage enhanced participation and investment of banks and development financial institutions in the Real Estate Investment Trusts (REITs).
The SBP in a statement said that in line with the government initiative for the development of housing and construction sector, the State Bank of Pakistan (SBP) has been taking various regulatory steps to enhance banks/DFIs participation through their financing in the development of these sectors.
In order to boost activities in these sectors further, the SBP has now made changes to certain provisions of existing Prudential Regulations for Corporate & Commercial Banking to encourage enhanced participation and investment of banks/DFIs in the REITs.
REITs are asset management companies that own or finance income-producing real estate across a range of property sectors. These asset management companies raise funding from general public and institutions by floating various kinds of funds. REITs deploy funds by investing in real estate properties thereby enhancing the investment in housing and construction sector to contribute in economic growth and development.
The units of listed REITs, are tradable on stock exchanges and offer a number of benefits to investors.
The changes in SBP regulations would enable banks/DFIs to make higher investments in REITs to the tune of 15 percent of their equity as against existing limit of 10 percent of equity. This move will not only bring more capital towards REITs but would also enable banks/DFIs to diversify their investments.
In addition, SBP has also relaxed restriction, in existing regulations, on seeking financing against shares of listed group companies. It will enable investors in raising liquidity for further investment in new business opportunities and ventures leading to greater economic activity.
The change in regulation would also benefit the capital market by encouraging sponsors of companies to consider listing on the stock exchanges.
This will promote documentation of the economy, transparency, and good corporate governance practices as well.
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Pakistan’s current account posts $881 million surplus in eight months
KARACHI: The balance of payment has posted a current account surplus of $881 million during first eight months (July – February) of 2020/2021 as compared with a deficit of $2.74 billion in the corresponding months of the last fiscal year, State Bank of Pakistan (SBP) said on Sunday.
According to balance of payment data, trade deficit ballooned to $16.08 billion during first eight months of the current fiscal year as compared with the deficit of $13.16 billion in the same months of the last fiscal year.
However, the deficit in services trade narrowed to $1.13 billion during the period under review as compared with the deficit of $2.3 billion in the first eight months of the last fiscal year.
Overall balance on trade in goods and services posted a deficit of $17.42 billion during July – February 2020/2021 as compared with the deficit of $3.83 billion in the corresponding period of the last fiscal year.
Workers’ remittances grew to $18.74 billion during first eight months of the current fiscal year as compared with $15.1 billion in the same months of the last fiscal year.
Balance of secondary income increased to $21.54 billion during July – February 2020/2021 as compared with $16.56 billion in the corresponding period of the last fiscal year.