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  • SBP directs banks to open EKBNS Fund Account

    SBP directs banks to open EKBNS Fund Account

    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.

  • Parliament to approve amendments to SBP Act by September

    Parliament to approve amendments to SBP Act by September

    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.

  • Bank timings during Ramazan-ul-Mubarak

    Bank timings during Ramazan-ul-Mubarak

    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.

  • SBP governor highlights measures to boost debt, capital markets

    SBP governor highlights measures to boost debt, capital markets

    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.

  • Bank holiday for Zakat deduction

    Bank holiday for Zakat deduction

    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).

  • Workers’ remittances grow to $21.47bn in first nine months

    Workers’ remittances grow to $21.47bn in first nine months

    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.

  • SBP decides to retain two-year history of borrowers’ default, delayed payments

    SBP decides to retain two-year history of borrowers’ default, delayed payments

    KARACHI: The State Bank of Pakistan (SBP) on Friday announced that it will retain credit history of defaulters and delayed payments in Electronic Credit Information Bureau (eCIB) from July 01, 2021.

    Currently the eCIB is maintaining the credit history of default and delayed payment of borrowers only for one year.

    The SBP in a statement said that from July 2021, State Bank of Pakistan (SBP) has decided to include two years history of negative/overdue information for consumer/individual borrowers’ in the eCIB reports of State Bank of Pakistan in line with international practices. Currently, the eCIB report reflects negative/overdue information for consumer/individual borrowers’ for one year.

    Electronic Credit Information Bureau (eCIB ) of SBP collects and collates credit data on borrowers from its member Financial Institutions (FIs). The financial data is then aggregated in system and the resulting information, in the form of credit reports, is made available online to the member FIs for the purpose of credit assessment, credit scoring and credit risk management. The major purpose of this database is to enable the Financial Institutions (FIs) to know the credit history of their current and prospective customers thus enabling them to make informed and timely lending decisions.

    The decision was undertaken by the SBP to align its eCIB policies with international practices and to meet the Ease of Doing Business Survey (EODB) requirement of displaying at least two years history in the eCIB reports.  The same will help in the enhancement of the credit assessment capability of the member FIs of their current and potential customers. 

    It is very important to note that this change will be adopted on prospective basis and will be effective from July 2021 onwards.  Accordingly, any default, delay in payment, etc. prior to 1st July 2021 will continue to be reflected in the credit report of the customers only for one year. However, defaults, delayed payments, etc. after 1st July 2021 will be shown on the credit reports for two years. All the member FIs are advised to bring the contents of this policy change in the knowledge of their existing and potential customers. Besides, the member FIs should also ensure upfront disclosure to their current and potential customers regarding the eCIB reporting requirement and its implication i.e. (the reflection of overdue/late payments/write off/waiver, etc.) in eCIB reports after settlement of their liabilities.

  • SBP receives $2.5bn of Eurobonds issuance

    SBP receives $2.5bn of Eurobonds issuance

    KARACHI: State Bank of Pakistan (SBP) on Thursday said that it has received government proceeds of $2.5 billion Eurobonds issuance in its account.

    The central bank in a tweet said that as a result of current transfers, the SBP’s foreign exchange reserves are closed above $16 billion on Thursday, the highest level since July 2019.

    Earlier, a statement issued from Islamabad said that Pakistan had entered the international capital market after a gap of over three years by successfully raising USD 2.5 billion through a multi-tranche transaction of 5-, 10- and 30-year Eurobonds.

    The transaction generated great interest as leading global investors from Asia, Middle East, Europe and the US participated in the global investor calls and the order book.

    This is for the first time that Pakistan has adopted a program-based approach with registration of Global Medium-Term Note (GMTN) program. The program will allow Pakistan to tap the market at short notice.

    The Government intends to make full use of this program and become a regular issuer in the International Capital Markets.

  • Country’s foreign exchange reserves ease to $20.679 billion

    Country’s foreign exchange reserves ease to $20.679 billion

    KARACHI: The liquid foreign exchange reserves of the country have declined by $157 million to $20.679 billion by week ended April 02, 2021, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.836 billion by week ended March 26, 2021.

    The official reserves of the SBP fell by $146 million to $13.527 million by week ended April 02, 2021 as compared with $13.673 billion a week ago. The SBP attributed the decline to external debt repayments.

    The foreign exchange held by commercial banks also eased by $11 million to $7.152 billion by week ended April 02, 2021 as compared with $7.163 billion a week ago.