Tag: SBP

SBP issues procedure for investment in Naya Pakistan Certificates

KARACHI: State Bank of Pakistan (SBP) on Thursday issued procedure for investment in Naya Pakistan Certificates (NPC) which will be offered to both overseas and resident Pakistanis at attractive rates of return in Pak Rupee and US Dollar denomination bills.

The SBP said that The certificates shall be subscribed by eligible individuals through Foreign Currency Value Account (FCVA) or NRP Rupee Value Account (NRVA), being marketed as Roshan Digital Accounts (RDAs) by the agent banks.

The funds for investment in Certificates must be remitted from abroad in the investor’s FCVA or NRVA after June 30, 2020.

The agent banks shall be responsible for Know Your Customer (KYC), Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) of the investors.

The Certificates shall be offered digitally through the web-links of following agent banks: Bank Al-Falah, Faysal Bank, HBL Bank, MCB Bank, Meezan Bank, Samba Bank, United Bank Limited and SCB Pakistan.

The investors shall have the option to subscribe either Pak Rupee denominated or US Dollar denominated certificates of 3-Month, 6-Month, 12-Month, 3-Year and 5-Year tenors.

Amount of Investment in each tenor certificate shall be as under:

US Dollar Denominated Certificates	Minimum investment of USD 5,000 with integral multiples of USD 1,000.
PKR Denominated Certificates	Minimum investment of PKR 100,000 with Integral multiples of PKR 10,000.

The Certificates of following tenors shall be yielding gross return (before the deduction of tax) as under:

Tenor of Certificate	USD Denominated Certificate	PKR Denominated Certificates
3-Month	5.50%, p.a.	9.50% p.a.
6-Month	6.00% p.a.	10.00% p.a.
12-Month	6.50% p.a.	10.50% p.a.
3-Year	6.75% p.a.	10.75% p.a.
5-Year	7.00% p.a.	11.00% p.a.

The 3-Month, 6-Month and 12-Month tenor certificates shall be single-coupon securities on which principal and profit shall be paid on maturity or on premature encashment. Whereas, 3-Year and 5-year certificates shall be coupon securities, on which periodic profit payment shall be paid on half-yearly basis.

The Investor will place the order to subscribe the certificate electronically by visiting the NPC webpage of their respective agent bank and giving investment details including currency, tenor and the amount to be invested.

The PKR denominated NPCs can only be purchased from the balances in the investors’ NRVAs whereas USD denominated NPCs can be purchased from the balances in the investors’ FCVAs. For the investors having their FCVAs in currency other than USD, the banks shall debit the investors’ account by an amount equivalent to the amount of investment requested in USD denominated NPCs by applying the exchange rate prevailing at the time of execution of the transaction.

The agent banks shall, after debiting the investor’s account with an amount equal to the amount of his/her investment order, consolidate the orders received from FCVA or NRVA holders during a working day till 1:00 p.m. Pakistan Standard Time (PST), and shall transmit the same on the prescribed format to the SBP through SBP’s Data Acquisition Portal (DAP) by 2:30 p.m. (PST) the same day.

In case of purchase of US Dollar denominated certificates, agent banks have two options to remit the purchase value of certificates to State Bank of Pakistan (SBP) either through their USD Clearing Account maintained with SBP, or through transfer of funds to the nostro account of SBP maintained with the Federal Reserve Bank of New York, New York, USA. Details of SBP’s nostro account are provided hereunder:

Beneficiary Bank Name:	Federal Reserve Bank of New York, New York, U.S.A.
Beneficiary Account Title:	State Bank of Pakistan, I.I.Chundrigar Road, Karachi, Pakistan.
Beneficiary Account Number	021085172.
Beneficiary Bank SWIFT/BIC:	FRNYUS33.

Transaction charges, including but not limited to correspondent bank charges shall be on the account of the banks, and the banks shall ensure to remit to the SBP nostro account the complete purchase amount of the Certificates.

In case of purchase of Pak Rupees denominated certificates, agent banks shall authorize SBP to debit the total purchase value of these certificates from their Pak Rupees account maintained with the SBP and issue the Naya Pakistan Certificates of aforesaid maturities per contra credit to the respective bank’s SGLA account (IPS holding).

After debiting the USD Clearing Account (or Pak Rupees current account) of the concerned bank, SBP shall issue the Certificates on the same day on which the order is placed through the Subsidiary General Ledger Account (SGLA) by affording requisite credit to the IPS holding account thereof. However, where the purchase value of the order is remitted to the aforesaid nostro account of SBP, Certificates will be issued on T+1 basis in the like manner.

PROCEDURE OF PERIODIC PAYMENTS: 1. Periodic Coupon Payments:

The periodic coupon payments shall be made on six (6) monthly basis only in respect of Certificates of 3-year and 5-year maturities in their respective currencies.

The six (6) months for the periodic coupon payment shall be determined from the date of issuance of the certificates. For example: if certificates are issued on 10th September 2020, the profit payments shall be made on 10th March 2021 and on subsequent six-monthly dates accordingly.

SBP shall make the periodic coupon payments (net of deduction of tax as specified in Rule 18 of the NPC Rules, 2020) on their respective due dates by crediting the USD Clearing account of the bank, or as the case may be the PKR current account, with advice to the bank concerned for onward credit to the investors’ FCVA or NRVA on the same day.

In the event of failure of the bank to credit the amount in the investor’s account, despite receipt of credit from SBP in its account (US Dollar clearing account or PKR current account), the bank shall be liable to make the investor good by paying compensation for the delayed period at the coupon rate as may be applicable to the respective Certificates.

Premature Encashment:

The Investors can have premature encashment of their certificates. Premature encashment proceeds shall be worked-out such that rate of return accruing to that investor is equivalent to rate of return of the nearest shorter maturity of Certificates or such rate as may be notified by Finance Division from time to time. However, no profit shall be paid in case of encashment of certificates before completion of 3 (three) months. The illustrations for calculation of net encashment proceeds in case of premature encashment are attached at Annexure C-3.

The request for Premature Encashment shall be submitted through the investor’s respective agent bank. The banks shall consolidate all requests received on a single day and intimate the SBP through DAP on the prescribed format attached at Annexure C1/C2.

SBP shall afford credit in the USD Clearing account or PKR current account of commercial bank the net encashment proceeds on T+2 working day basis, where T is the date of submission of request by agent bank as mentioned in [B2(b)] above.

The requesting bank shall credit the FCVA or NRVA of investor on the same day on which it receives credit from the SBP in its account, failing which the bank shall be liable to make the investor good by paying compensation for the delayed period at the same rate as may be applicable to the encashed NPC.

Redemption at Maturity:

Maturity proceeds of Certificates, including the amount of final coupon (net of deduction of tax), shall be credited to the USD Clearing account or PKR current account of the investor’s bank account maintained with SBP.

On realization of maturity proceeds by the banks in their accounts with the SBP, the bank shall be liable to credit the FCVA or NRVA of respective investor on the same day, failing which the bank shall be liable to make the investor good by paying compensation for the delayed period at the coupon rate as may be applicable to the respective Certificates.

The Certificate shall not be automatically reinvested or rolled-over after the maturity date.

GENERAL INSTRUCTIONS:

In case of a holiday on the periodic profit or principal payment date, the next working day falling after the holiday will be considered the periodic profit date/principal payment date. In such case, no profit will be payable for the period of the holidays.

The Certificates shall be pledgeable as security for raising financing in Pakistan subject to such conditions as may be prescribed by SBP.

The Certificates are not transferable except if required under the relevant laws.

SBP, and/ or the agent banks, reserve the right to accept or reject the investment application if the investor does not comply with the necessary requirements under the rules or instructions.

In case of death of an investor, the payment (principal and profit, if any), will be made to the legal heirs of the deceased investor in accordance with the succession certificate or equivalent documentation in accordance with the law for the time being in force.

September 10, 2020

Foreign exchange reserves increase to $19.961 billion

KARACHI: The country’s foreign exchange reserves increased by $118 million to $19.961 billion by week ended September 4, 2020, State Bank of Pakistan (SBP) said on Thursday.

The foreign exchange reserves of the country were at $19.843 billion by week ended August 28, 2020.

The official reserves of the SBP increased by $95 million to $12.808 billion by week ended September 04, 2020 as against $12.713 billion a week ago.

The SBP attributed the increase in reserves to proceeds of $121 million from Asian Development Bank (ADB).

The foreign exchange reserves held by commercial banks also increased by $23 million to $7.153 billion as against $7.130 billion a week ago.

September 10, 2020
Bank deposits reach all-time high at Rs16.327 trillion

Karachi – The banking sector in Pakistan has witnessed a historic surge in deposits, reaching an all-time high of Rs16.327 trillion by the end of August 2020, according to data released by the State Bank of Pakistan (SBP) on Thursday.
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September 10, 2020
Roshan Digital Accounts: SBP issues instructions for facilitating overseas Pakistanis

KARACHI: State Bank of Pakistan (SBP) on Wednesday issued instructions to designated banks for compliance in facilitating overseas Pakistanis in opening their bank accounts.

The SBP said that it had launched the ‘Roshan Digital Accounts (RDA) for Non-Resident Pakistanis’ (NRPs) to enable them to remotely open bank accounts in Pakistan through online digital portals of your bank without physically visiting branches.

For this purpose, SBP has already issued a simplified account opening framework and other regulatory instructions.

Using their RDAs, NRPs can now avail digital banking facilities, including access to online banking, domestic funds transfer, utility bills and tuition fee payment in Pakistan, as well as investments in government bills, stock exchange, and real estate sector with option of full repatriation.

To make the scheme a success it is imperative that participating banks provide excellent user experience and convenience to prospective and existing customers while maintaining high service standards. In this regard, the following instructions are being issued for strict compliance:

Development and Continuous Improvements of RDA Portals and Mobile Apps: Banks shall ensure compliance with the following minimum requirements for developing and maintaining their web portals:

Banks shall continuously endeavor to provide an exceptional and seamless digital experience to their customers via their web portals, mobile apps and other digital channels.

Bank shall ensure that official Logo of RDA as provided by SBP is clearly displayed on web-portals, mobile apps and other marketing collaterals.

Banks shall ensure full security of their digital channels including portals/mobile apps and ensure that customer information/documents are fully protected from unauthorized access.

Bank shall ensure that Data Security and Privacy Assurance Statements, explicitly mentioning that all the information/documents and data provided by customers is secure and will not be divulged, are displayed appropriately to ensure customer comfort in this regard.

Banks shall ensure that their web portals clearly provide an overview of the RDA scheme, and also display eligibility criteria and documentary requirements, as specified by SBP in the Framework for Remote/ Digital Onboarding of NRPs.

Banks shall ensure that video tutorials on how to open RDA account are provided on the web portals for customer assistance.

To provide 24/7 customer support, banks shall ensure that live chat option or other messaging services such as WhatsApp and Facebook Chat options are working during account opening. Moreover, for customer information/guidance, banks shall ensure that Frequently Asked Questions (FAQs) are prominently placed on their RDA page and are regularly updated.

Banks shall ensure that customers are able to save their applications, either themselves or automatically, at any stage of the account opening process.

Banks shall ensure that a feedback form is available for customers who visit their portals/download mobile apps for account opening. Banks shall also provide other mechanisms for soliciting customer feedback via call centers, email, social media etc.

Banks shall offer both Islamic and conventional accounts, where applicable/allowed and in various eligible currencies (and not just USD) as per the relevant rules and regulations of SBP.

Banks shall provide services like online banking, online fund transfers in Pakistan, payments of utility and other bill, mobile and wallet tops ups in Pakistan, investment in government securities such as Naya Pakistan Certificates (NPC), round the clock currency conversion services, and immediate repatriation of funds to their customers.

Banks shall also arrange for issuing debit, credit and virtual cards to their customers and enabling their online usage.

Banks may work with other stakeholder and provide options for other lifestyle banking products like investments in Pakistan Stock Exchange, real estate and other products/services commensurate with customer KYC.

Bank may offer the service to dispatch the ATM/Debit card and cheque book at the registered address of the NRP/POC card holders outside Pakistan. For this purpose, the banks shall explicitly mention the applicable charges, and take consent of the customer on the charges before providing this services. The banks shall institute effective controls to manage the associated risks.

Account Opening Process: Banks shall ensure compliance with the following minimum requirements for ensuring a seamless account opening and monitoring process:

Banks shall ensure that accounts are opened and activated after seeking the information as specified in the Framework for Remote/ Digital Onboarding of NRPs issued by BPRD and updated from time to time. If banks require additional information as per their internal policies, they may do so after the accounts are opened and activated.

An account opening application may be considered as “In-Process”, once the bank receives a customer’s primary contact details such as name, valid email address/phone number and country of residence etc. These details should be solicited at the beginning of the account opening process. Banks shall ensure adequate follow up with these prospective clients to help them complete their application.

However, the bank may mark the application as “Closed – Customer not interested”, if the customer fails to complete their application and provide relevant documentation within a reasonable time-period, to be determined by the bank but which shall not be less than 30 days, or explicitly informs the bank of their intent to withdraw their application.

Banks shall depute adequate number of resources such as Relationship Officers to ensure that customers are contacted in a timely manner to avoid backlog of customer applications and unnecessary delays in account opening. Further, during the course of account opening, banks shall put in place an appropriate mechanism to update the customer of their application status, such as In-Process, pending due to missing information/documents, pending due to incorrect information, successful or declined.

September 9, 2020
Foreign exchange reserves increase to $19.84 billion

KARACHI: The liquid foreign exchange of the country has increased by $121 million to $19.843 billion by week ended August 28, 2020, State Bank of Pakistan (SBP) said on Thursday.

The foreign exchange reserves were at $19.722 billion by week ended August 21.2020.

The official foreign exchange reserves of the SBP increased by $72 million to $12.713 billion by week ended August 28, 2020 as compared with $12.641 billion a week ago.

Similarly, the foreign exchange reserves held by commercial banks also increased by $49 million to $7.13 billion by week ended August 28, 2020 as compared with $7.081 billion a week ago.

September 3, 2020
SBP issues instructions to banks on sugar import

KARACHI: State Bank of Pakistan (SBP) on Monday issued instructions to banks regarding import of sugar by private importers.

The central bank said that the ministry of commerce had issued a public notice stating that the government had allowed import of 200,000 tons of white sugar by private importers as per the terms and conditions mentioned therein.

The SBP said that to facilitate the import of sugar under the subject Public Notice, the banks may process the requests for import of white sugar as per following terms and conditions:

Import may be allowed on behalf of those importers who have been issued permit(s) by the Ministry of Commerce under the above-mentioned Public Notice;

Import may be allowed on CFR Free out basis, as an exception to the instructions given under Para 5 Chapter 13 of the FE Manual;

Advance payment up to 100 percent of the value of letter of credit/contract/proforma invoice may be allowed, subject to compliance with other terms & conditions given under Para 30 of Chapter 13 of the FE Manual;

The commercial banks have been asked to submit consolidated data of LCs issued and advance payments made, against issued permits, to Foreign Exchange Operations Department, SBP BSC, Head Office, Karachi on daily basis.

The banks should also ensure compliance with all other terms & conditions of permit(s) issued by Ministry of Commerce.

August 31, 2020
Bank holidays announced for Ashura

KARACHI: State Bank of Pakistan (SBP) on Tuesday announced that the central bank will remain closed on August 29 and 30 on occasion of Ashura, Muharram ul Haram, 1442 AH.

The SBP, in a statement, said that the central bank will remain closed on August 29-30, 2020 (Saturday and Sunday) on the occasion of Ashura, Muharram-ul-Haram, 1442 AH.

August 26, 2020
Banks fail to meet agri credit disbursement target

KARACHI: Banks have missed agriculture credit disbursement target for fiscal year 2019/2020 by Rs135 billion but the credit disbursement was 3.5 percent higher than the preceding fiscal year, State Bank of Pakistan (SBP) said on Monday.

The central bank in a statement said that the banks disbursed Rs 1,215 billion to agriculture sector during 2019-2020. This is 3.5 percent higher than the amount disbursed in the previous fiscal year but less than the credit target of Rs 1,350 billion which was set by Agricultural Credit Advisory Committee (ACAC) in Peshawar in November 2019.

Some factors which have constrained the growth of agriculture credit include the impact of COVID-19 pandemic, locust attack and continuing real side issues including water shortage, low production of cotton, sugarcane, low off take of fertilizers and volatility in prices of agri. produce etc.

The outstanding portfolio of agriculture credit increased to Rs 581 billion at end June, 2020, registering growth of 3.3 percent compared with the last year’s position of Rs 562 billion.

However, the number of agriculture borrowers declined from 4.01 million at end June 2019 to 3.74 million at end June 2020 due to the COVID-19 lockdown situation in the country.

The analysis of disbursement reveals that during FY 2019-20, five major commercial banks collectively disbursed agriculture loans of Rs 708.3 billion or 100.5 percent of their annual target of Rs 705 billion, specialized banks disbursed Rs 71.1 billion or 62.9 percent of their annual target of Rs 113 billion and fourteen domestic private banks as a group achieved 88.7 percent by disbursing Rs 225.0 billion against their target of Rs 253.6 billion.

Further, the five Islamic Banks as a group achieved 76.6 percent of their annual target of Rs 55.0 billion by disbursing Rs 42.1 billion which is 6.1 percent higher than the disbursement made during the corresponding period last year. Similarly, the Islamic windows of commercial banks disbursed Rs 43.5 billion or 79.2 percent against the target of Rs 55.0 billion in FY 2019-20 which is 33 percent higher from the disbursement of Rs 32.7 billion made during last year.

The agriculture credit of microfinance sector remained relatively sluggish due to COVID-19 lockdown in the 2nd half of FY 2019-20. The Microfinance Banks (MFBs) as a group have achieved 75.7 percent by disbursing agriculture loans of Rs 139.3 billion to small farmers which is 9.5 percent lower than the disbursement of Rs 154 billion during same period last year.

Likewise, the Microfinance Institutions/Rural Support Programs collectively achieved 73.4 percent of their targets by disbursing Rs 28.9 billion which is 15 percent lower than the disbursement of Rs 34 billion made during the last year to small and marginalized farmers.

It is important to mention that SBP announced a comprehensive relief package in collaboration with stakeholders for relief of agriculture sector to deal with the adverse implications of the ongoing pandemic on the farming community and agriculture business in the downstream of value chains. These measures which included deferment of principal and restructuring/rescheduling of agriculture loans were initially allowed uptill June 30, 2020 have been extended upto 30 September 2020.

SBP will continue to monitor the situation and it may introduce more measures to help the sector manage its finances during this temporary phase of disruption.

August 24, 2020
FPCCI praises SBP for timely action to avert coronavirus impact

KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has praised State Bank of Pakistan (SBP) for timely action to minimize adverse impact of coronavirus on trade and industry, a statement said on Monday.

“However, implementation of such measures is required to reach at the grass root level,” said Khurram Ijaz, Vice President, FPCCI, while chairing webinar on ‘Implications of Covid-19 on the Financial Market/Institutions of Pakistan.’

He said that outbreak of Coronavirus has not only affected the trade and industry of Pakistan, but drastically declined the performance of the financial market and major economic indicators in the economy.

During discussing, Arjumand Qazi, Group Head (SME)- Pak Brunei Investment said that SBP has indeed extended maximum support to the trade and industry in term of designing and announcing effective financing schemes since April 2020.

However, commercial banks and other financial institutions are still reluctant to extend such facilities to rural businesses.

Khurram Shehzad renowned financial expert appreciated SBP’s measure to decrease the interest rate from 13 percent to almost 7 percent in last 6 months.

He said that it is high time that commercial banks, investment companies and other stakeholders of the financial market play their part in the economic and financial survival of the economy.

Hasan Raza, Head of Project Management in Research Dept. Pakistan Stock Exchange (PSX) said that Pakistan Stock Exchange fell down to 27000 index point in February 2020 at the start of the lockdown, but with the efforts of PSX, the KSE index point has reached upto 40,000 index point in August 2020.

He further shared information regarding newly launched mutual funds and new Sukuk bonds in 2020.

While expressing his views, Zubair Haider Sheikh, Head of Cooperate & Investment Banking-Dubai Islamic Bank said that as the country is moving back to normal activities amid ease of lockdown in the economy, the commercial banks must come upfront to expand Temporary Economic Refinance Facility (TERF) as well as long term financing schemes to the masses.

Ahsan Mahenti, Managing Director, Arif Habib Commodities while appreciating SBP’s initiatives to fight the financial losses bared by the business during lockdown however, there is still need of incentive driven policies to support the corporate sector as well.

Participants of the webinar included Ali Kamal, Head of Research National Investment Trust (NIT), Imran Khali, Chairman Pak-Maldives Business Councils of FPCCI, Shabbir Mansha, Convener FPCCI Standing Committee on Custom Affairs, Amber Paracha Head of Credit Risk Management of Pak-Brunei Investment, members Trade Bodies and prominent members of FPCCI appreciated the initiative by FPCCI for conducting such informative seminars on various topics economic issues highlighting the problems and solutions which is highly commendable.

August 24, 2020
Pakistan records current account surplus of 1.9pc to GDP in July

KARACHI: The balance of payment of the country registered current account surplus i.e. 1.9 percent of the GDP during the first month of the current fiscal year, according to statistics released by State Bank of Pakistan (SBP) on Monday.

The BOP witnessed a current account deficit of 2.8 percent of the GDP in July 2019.

The statistics revealed that the current account surplus stood at $424 million in July 2020 as compared with current account deficit of $613 million in the same month of the last year.

The current account surplus may be attributed to record inflows of workers’ remittances in July 2020. In the month under review the workers’ remittances rose to $2.77 billion. This is the highest ever level of remittances in a single month in Pakistan, according to the SBP.

The exports also exhibited 6.1 percent growth to $2 billion in July 2020 as compared with $1.88 billion in the same month of the last year. On the other hand the import bill of the country declined by 0.7 percent to $3.68 billion in July 2020 as compared with $3.71 in the same month of the last year.

The trade deficit narrowed by 7.7 percent to $1.68 billion in July 2020 as compared with the deficit of $1.83 billion in the same month of the last year.

August 24, 2020