KARACHI: The flow of foreign direct investment (FDI) into the country has declined by 24 percent to $416 million during first quarter (July – September) of current fiscal year, State Bank of Pakistan (SBP) said on Friday.
The FDI was $545 million in the same quarter of the last fiscal year.
The inflow under this head fell by 17.5 percent to $621 million during first quarter of the current fiscal year as compared with $753 million in the same quarter of the last fiscal year.
Similarly, the outflows of FDI recorded $205 million during July – September of 2020/2021 million as compared with $207 million in the same period of the last fiscal year.
The inflows in the stock market witnessed sharp decline during the period. The portfolio investment witnessed 578 percent decline when compared with outflow of $108.5 million during the first quarter of the current fiscal year as compared with inflows of $22.7 million in the same period of the last fiscal year.
The net inflows of foreign private investment fell by 46 percent to $307 million during July – September 2020/2021 as compared with $586 million in the same period of the last fiscal year.
KARACHI: The liquid foreign exchange reserves of the country have declined by $336 million to $19.015 billion by week ended October 09, 2020, State Bank of Pakistan (SBP) said on Thursday.
The foreign exchange reserves of the country were at $19.351 billion by week ended October 02, 2020.
The official reserves of SBP fell by $357 million to $11.798 billion by week ended October 09, 2020 as against $7.196 billion a week ago.
The SBP attributed the decline in foreign exchange reserves to external debt repayment of $507 million during the week.
KARACHI: The deposits of banking system surged to a new record high of Rs16.886 trillion by end of September 2020, according to data released by State Bank of Pakistan (SBP) on Wednesday.
The bank deposits reached to new record-level from previous all-time high of Rs16.327 trillion by end of August 2020.
The deposits of the banking system recorded growth of 20.39 percent in September 2020 when compared with the stock of Rs14.026 trillion in the same month of the last year.
The significant growth in banking deposits has been attributed to higher foreign inflows and safe venue to keep money amid coronavirus pandemic.
They said that growth in deposits has been fueled by higher remittances (+15 percent YoY in USD and 27 percent YoY in PKR terms during eight months of 2020), while lack of business activity due to COVID-19 (cash-based) may have also resulted in increase in bank deposits.
Investments of banks have increased to Rs11.09 trillion by end of September 2020, which is 19.65 percent higher when compared with the investment of Rs9.269 trillion in the same month of the last year.
Investment to Deposit Ratio (IDR) is around 66 percent in September 2020. The higher IDR is largely due to high interest rates at the start of the year and low appetite for risk (advances) due to COVID-19 lately.
On the other hand, advances have grown by just 1.5 percent YoY to Rs8.094 trillion by end September 2020 as compared with Rs7.975 trillion by end of same month of the last year.
This is despite the aggressive cuts in interest rates by the Pakistan Central Bank since March 2020 as the impact of COVID-19 pandemic has reduced the overall risk appetite of banks.
KARACHI: State Bank of Pakistan (SBP) on Monday announced interest rates for loan obtained under Naya Pakistan Housing scheme.
The maximum size of loan shall be Rs5 million and the loan shall be available for the maximum limit at 7 percent for first five years and at 9 percent for remaining five years. The bank prices shall be KIBOR + 4 percent.
The SBP said that in line with its vision of providing affordable housing to the masses, Government of Pakistan will be providing a markup subsidy facility for the construction and purchase of new houses.
This facility will allow all individuals, who will be constructing or buying a new house for the first time, to avail bank’s financing at subsidized and affordable markup rates.
This facility will be provided with the administrative support of State Bank of Pakistan as executing partner with Government of Pakistan and Naya Pakistan Housing and Development Authority (NAPHDA).
The government has allocated Rs33 billion for payment of markup subsidy for financing over a period of 10 years and has assured continuity of the facility.
For this purpose, State Bank and Government of Pakistan have signed a memorandum of understanding.
The markup subsidy facility will be available through all banks and is divided in three tiers:
Financing under Tier I is available for purchase of houses/apartments/flats of upto 5 marla or 125 sq. yards, with maximum covered area of 850 sq. feet and maximum price of Rs. 3.5 million, under NAPHDA projects. Maximum financing under this Tier is Rs. 2.7 million with maximum tenor of up to 20 years. Banks will charge maximum markup rate of KIBOR plus 250 basis points.
However, GOP will provide markup subsidy to reduce borrowers’ rate to 5 percent for first five years and 7 percent for next five years.
KIBOR is the Karachi Interbank Offer Rate that is determined in the interbank market on a daily basis and is used as a benchmark for most of the retail lending by banks.
These rates are published on the website of State Bank of Pakistan on a daily basis.
Financing under Tier II is also for houses/apartments/flats upto 5 marla or 125 sq. yards with maximum covered area of 850 sq. feet and maximum price of Rs 3.5 million.
Maximum financing under this Tier is Rs 3 million with maximum tenor of up to 20 years. This Tier facilitates construction or purchase of housing units by individuals and households who have not applied or qualified for NAPHDA projects.
Banks will charge maximum markup rate of KIBOR plus 400 basis points. However, subsidized rate for the borrowers for first 10 years under Tier 2 is the same as that of Tier I.
The Tier III of the facility promotes affordable housing for middle-income families. This Tier allows subsidized financing for construction or purchase of houses/apartments/flats of more than 5 marla (125 sq. yards) and upto 10 marla (250 sq. yards) with maximum covered area from 850 sq. feet to 1,100 sq. feet and maximum price of Rs 6 million.
Maximum financing under this Tier is Rs. 5 million with maximum tenor of up to 20 years. Banks will charge maximum markup rate of KIBOR plus 400 basis points. However, GOP will provide markup subsidy to reduce borrowers’ rate to 7 percent for first five years and 9 percent for next five years.
It is expected that introduction of the facility with supply of fresh housing units through concerted efforts of NAPHDA and other stakeholders will help transform Government’s vision into reality.
The SBP issued following rates and criteria through a circular:
Markup Subsidy for Housing Finance
1. Housing plays an important role in economic development by contributing in GDP growth, employment generation and social wellbeing. Further, more than 40 industries and 70 percent of unskilled labor are linked with housing and construction sector.
2. In order to provide formal financial services at affordable rates, Government of Pakistan is providing Markup Subsidy for Housing Finance. The key features of the facility approved by the Government are given below:
Particulars
Markup Subsidy Program
Eligibility Criteria
All men/women holding CNIC First time home owner One individual can have subsidized house loan facility under this scheme only once Only for construction and first purchase of newly constructed affordable housing units
Size of Housing Unit
Size of the loan is segregated into three tiers, as under: Tier 1 (T1) – Housing Units/apartments of up to 125 square yards (upto 5 Marla) with covered area of up to 850 square feet. (NAPHDA) Tier 2 (T2) – Housing Units/apartments of up to 125 square yards (5 Marla) with covered area of up to 850 square feet. Tier 3 (T3) – Housing Units of more than 125 square yards up to 250 square yards (10 Marla) or apartments with covered area from more than 850 square feet to 1,100 square feet.
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 2 (T2) – Rs 3.5 million Tier 3 (T3) – Rs. 6.0 million
Maximum Loan size
Maximum size of the loan of a single housing unit, as under:
Tier 1 (T1) – Rs 2.7 million Tier 2 (T2) – Rs 3.0 million Tier 3 (T3) – Rs. 5.0 million
Loan type
Long term housing finance loans
Loan Tenor
10/15/20 years, 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 of Pakistan.
Pricing
Pricing for Housing Loans: Tier-1: 5% for first 5 years & 7% for next 5 years at KIBOR+250 BPS Tier-2: 5% for first 5 years & 7% for next 5 years at 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 will be applicable for the period exceeding 10 years.
Executing Agency
All commercial banks including Islamic 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 Procedures
Banks 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 distribution
Geographical distribution
3. Banks can also avail risk coverage against the housing finance under the scheme from Pakistan Mortgage Refinance Company (PMRC) at mutually agreeable terms and conditions.
4. The banks are advised to ensure successful implementation of this facility through dissemination of necessary instructions to branches/ regions and capacity building of field staff, development/alignment of financing products and marketing campaigns, etc.
KARACHI: The inflow of workers’ remittances has registered sharp increase of 31.2 percent after making fourth consecutive month of over $2 billion received in September 2020.
The State Bank of Pakistan (SBP) on Monday said that the remittances increased to $2.3 billion, 31.2 percent higher than the same month last year and 9 percent higher than in August 2020.
Workers’ remittances remained above $2 billion for the fourth consecutive month in September, the central bank said.
On a cumulative basis, remittances rose to a record $ 7.1 billion in first quarter of current fiscal year, 31.1 higher than the same period last year.
The level of remittances in September was slightly higher than SBP’s projections of $2 billion.
Efforts under the Pakistan Remittances Initiative (PRI) and the gradual re-opening of major host destinations such as Middle East, Europe and United States contributed to the sustained increase in workers’ remittances.
Prime Minister Imran Khan earlier in his tweet said: “Despite COVID more good news for our economy. Alhamdulillah, remittances from our hardworking overseas Pakistanis rose to $2.3 billion in September 2020, 31 percent higher than last September and 9 percent higher than August 2020. This marks the fourth consecutive month that remittances have remained above $2 billion.”
KARACHI: State Bank of Pakistan (SBP) on Sunday issued Frequently Asked Questions (FAQs) in response to SRO issued by the finance ministry related to foreign currency account rules.
KARACHI: State Bank of Pakistan (SBP) has said that recently issued regulations related to foreign currency account have been aimed to strengthen the foreign exchange regime in the country.
“The recently issued rules aim to provide a regulatory framework for the operation of individual foreign currency accounts,” the SBP said in a statement issued on Saturday-Sunday midnight.
Such a framework represents a continuation of the State Bank of Pakistan’s efforts to strengthen the foreign exchange regime and make it more market-oriented.
Looking ahead, SBP will continue to take steps to facilitate greater use of banking channels for individuals to meet all their foreign exchange needs.
The SBP said that on October 06, 2020, the Federal Government issued Foreign Currency Accounts Rules, 2020 under the provisions of Protection of Economic Reforms Act, 1992.
There has been no change in the general or special permissions given by the State Bank to individuals under the foreign exchange regulations. According to paragraph iv, Chapter 6 of the Foreign Exchange Manual, foreign currency accounts can be fed by remittances received from abroad, travelers’ cheques issued outside Pakistan and encashment of securities issued by Govt. of Pakistan.
A foreign currency account of a citizen of Pakistan resident in Pakistan can also be fed with cash foreign currency only if the account holder is a filer as defined in Income Tax Ordinance, 2001.
ISLAMABAD: The ministry of finance on Friday issued rules governing foreign currency accounts of individuals under which there shall be no restriction on cash withdrawal or transfers from the foreign currency account.
The ministry issues rules governing foreign currency accounts of individuals, under which a foreign currency account of an individual may be credited with the remittances received from abroad through banking channel except:
— payment for goods exported from Pakistan;
— payment for services rendered in or from Pakistan;
— proceeds of securities issued or sold to non-residents; and
— any foreign exchange borrowed from abroad under any general or special permission of the State Bank of Pakistan (SBP).
It said that the SBP may issue any general or special permission for credit to the account.
The rules however, stated that a foreign currency account may be credited through transfer from other individual foreign currency account.
“Proceeds realized on account of profit, return and principal amount of investment made in any foreign currency dominated or foreign currency linked scheme of Government of Pakistan may be credited into the account,” it said.
A foreign currency account shall not be credited with any foreign exchange purchased from an authorized dealer, exchange company or money changer except as allowed by the SBP through general or special permission under any law. However, foreign currency brought in from abroad and duly declared at the point of entry into Pakistan with Pakistan Customs may be credited in the account.
The rules explained that there shall be no restriction on cash withdrawal or transfers from the foreign currency account.
KARACHI: State Bank of Pakistan (SBP) on Thursday allowed banks to outsource their case processing functions in order to provide more flexibility.
The SBP said that through Circular No. 03 /2015 dated August 26, 2015, under which the banks required to automate cash processing function and disburse only machine authenticated good quality banknotes of higher denomination to the public.
Presently all banks are issuing machine processed banknotes (Rs100 and above) to the public.
The SBP said that the Cash Management System (CMS) has given flexibility to banks to either have their own cash processing facilities or make arrangements with other banks having the required capacity to get their cash processed.
The outsourcing of processing of higher denominated banknotes was, however, kept restricted to other banks only having the requisite capacity as CMS did not allow outsourcing of this function to commercial cash processing companies.
In order to further enhance the flexibility for banks to get their cash processed and encourage greater innovation and development of cost effective models for cash processing, it has been decided to allow banks to outsource their cash processing functions.
“The banks may thus outsource their cash processing functions (sorting, authentication, and packing) for all denominations of banknotes to such cash processing companies having capacity to process the cash in full conformity with the CMS instruction.”
Banks shall ensure that the cash processing company (service provider), if any engaged, operates in full conformity with the CMS instructions issued vide FD Circulars No. 03 /2015 dated August 26, 2015 and No. 02 / 2017 dated March 10, 2017 as amended from time to time.
It is reiterated that compliance with the CMS instructions is the responsibility of banks outsourcing cash processing and any non-compliance of instruction by the service provider shall, for all intents and purposes be treated as non-compliance by the concerned bank, making the bank liable to penal action under the CMS.
Banks shall contractually bind the service provider that SBP may conduct surprise visits of its CPCs, to assess the control environment and regulatory compliance regarding CMS.
The Banks while engaging the service provider shall ensure compliance with SBP instructions on outsourcing arrangement with third parties, as issued vide BPRD Circular No. 6 of 2019 dated December 17, 2019, as amended from time to time.
The Banks shall report all such arrangements to Finance Department SBP along with details of branches and ATMs to be fed through the outsourced service providers within seven (7) days of signing of contract with the service provider. The Banks shall also share the address(es) of the cash processing centers of the service provider and contact details of the CEOs and other senior management for SBP’s information and record.
KARACHI: State Bank of Pakistan (SBP) has started implementing Treasury Single Account (TSA) and directed all banks to close all accounts related to government authorities.
In a communication issued on Wednesday, the SBP said that the Finance Division, Government of Pakistan (GoP) vide their letter F.No.1(1)/S.O(TSA)/2020 dated August 19, 2020 has directed all Federal Government Ministries, Divisions, Attached Departments and Subordinate Offices (MDAS) to close their banks accounts with the commercial banks/financial institutions and transfer the balance funds to the Federal Government’s Central Account No.I (non-food) with SBP.
The banks have been directed that their branches would receive the ”Account Closure Request” from the respective authorized signatories on the specified format issued by Finance Division (annexure B of aforesaid letter) for closure of such bank accounts and transfer of balances therein to SBP.
In this regard, following instructions are issued to banks for meticulous compliance:
a. In line with the instructions of authorized signatories, the banks shall close all such accounts and transfer their balances to SBP for onward credit to the Federal Government’s Central Account No.I (non-food).
b. In order to ensure closure of all the accounts and transfer of their balances to SBP through a standardized procedure, banks are hereby advised to develop their internal applications and processes to keep track of the i). Receipt of directives by the authorized signatories; ii). Closure of accounts by banks’ branches and transfer of available balances to their centralized treasury and iii). Transfer of the consolidated amount by the centralized treasury to the SBP through RTGS.
c. Upon receipt of account closure request, the respective branches will initiate the closure of accounts and transfer the available balances to their centralized treasuries within seven (07) days through their internal application referred in (b) above.
d. The respective branches shall convey the following details to their centralized treasuries, through standardized internal application referred in (b) above.
1. Names of Administrative/controlling ministries
2. Names of Government Departments/Institutions
3. Account Titles
4. IBANs
5. Balances Transferred
6. Branch Code
e. The centralized treasury of each bank shall transfer the aggregate amount of deposits surrendered by its branches on daily basis to SBP through RTGS Message Type (MT-202) for onward credit to the Federal Government’s Central Account No.I (non-food). The MT-102 shall invariably mention reference phrase “Government Deposit Transferred to Central Account-I (non-food)”.
f. The banks’ centralized treasuries shall forward the details of such closed accounts to SBP Banking Services Corporation (BSC) Karachi Office as per Annexure I.
