KARACHI, February 4, 2020 – In a significant move reflecting solidarity with Kashmiris, the State Bank of Pakistan (SBP) has declared a holiday on February 5, 2020, on the occasion of Kashmir Day.
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SBP takes steps to reduce cheque clearance time
KARACHI: Addressing another gap in cheque clearing whereby it took weeks to clear cheques in far flung areas of the country, SBP has allowed the use of Pakistan Real Time Interbank Settlement Mechanism (PRISM) for the settlement of cheques, said a statement on Monday.
This is expected to decrease the processing time for clearing of payment instruments in areas that are not easily accessible. This will also help the financial institutions in far flung areas to leverage digital channels for their clearing and settlement obligations, the SBP added.
To further improve the digital payment services landscape in the country and promote financial inclusion, SBP has issued instructions to the banking industry for improving the acceptance of payment cards in the country.
Specifically, SBP has taken three steps: one, the banks are now bound to offer the domestic payment scheme card, PayPak, to the customers as a first priority, whereas cards of international payment schemes like Visa, MasterCard and Union Pay may be issued on the request of the customer.
Two, the merchant discount rate (MDR) i.e. the fee charged by banks to the merchants, will now be in the range of 1.5 to 2.5 percent. Earlier banks were allowed to charge any fee to the merchants.
Three, the distribution of revenues generated from a merchant among the players including card issuer, card machine deploying entity and the payment scheme company, has also been rationalised to keep the incentives equitable among all the players.
These measures are expected to increase payment card acceptance access points in the country and in turn will also help in digitizing the economy and promoting financial inclusion.
It may be recalled that SBP launched the National Payment Systems Strategy in November 2019 and has since taken a number of steps to promote digitization of payment transactions in the country.
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Foreign exchange reserves up by $91 million
KARACHI: The liquid foreign exchange reserves of the country increased by $91 million to $18.362 billion by week ended January 24, 2020, State Bank of Pakistan (SBP) said on Thursday.
The foreign exchange reserves of the country were at Rs18.271 billion a week ago.
The reserves held by the central bank increased by $184 million to $11.915 billion by week ended January 24, 2020 from $11.731 billion a week ago.
The reserves held by commercial banks fell by $93 million to $6.447 billion from $6.538 billion.
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Import payments on open account allowed to facilitate commercial importers
KARACHI: State Bank of Pakistan (SBP) has allowed imports on open account for the import of raw materials and spare parts to facilitate small and medium manufacturing units and commercial importers.
The SBP in a circular issued on Tuesday said that F.E. Circular No. 07 dated July 20, 2018 whereby imports on open account basis was confined to industrial and manufacturing sector only for import of raw materials and spare parts for their own use.
These instructions were amended vide EPD Circular Letter No. 13 dated August 29, 2018 and EPD Circular Letter No. 15 dated September 14, 2018 to allow open account imports for specified sectors.
In order to facilitate small and medium manufacturing units and commercial importers, the above instructions have been further modified.
Henceforth, Authorized Dealers are allowed to effect import payments on open account basis on behalf of manufacturing and industrial users and commercial importers for import of raw materials and spare parts only to be used as input by the manufacturing/industrial concerns.
Authorized Dealers are advised to ensure meticulous compliance of above and other applicable regulatory instructions including those of Para 6, Chapter 2 of Foreign Exchange Manual which requires them, inter alia, to satisfy themselves that the transaction will not involve and is not designed for the purpose of contravention or evasion of any of the provisions of the Foreign Exchange Regulation Act, 1947 or of any rules, directions or orders issued thereunder.
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SBP enhances borrowing limit under LTFF to Rs5 billion
KARACHI: The State Bank of Pakistan (SBP) has enhanced the maximum borrowing limit under Long Term Financing Facility (LTFF) to Rs5 billion from Rs2.5 billion.
In a statement on Tuesday, the central bank said that it had extended the scope of LTFF to cover all permissible export oriented sectors.
This step is aimed at setting up of diverse export oriented projects in Pakistan and to boost exports in multiple sectors.
Further, to accommodate enhanced financing requirements of exporters for setting up long term export oriented projects, maximum limit of Rs. 2.5 billion has been enhanced to Rs. 5 billion per project under LTFF.
In line with the above measure, SBP has also provided additional concessional financing of Rs.200 billion to banks including Rs. 100 billion under Long Term Financing Facility (LTFF) and Rs. 100 billion under Export Refinance Scheme (EFS), to be utilized by June 30, 2020.
Going forward, to further promote SME exporters, SBP in consultation with the relevant stakeholders, is in the process of devising an elaborate mechanism for the allocation of LTFF and EFS to SME exporters.
These changes are likely to be announced in March 2020.
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SBP allows 100% advance payment for import
KARACHI: State Bank of Pakistan (SBP) has allowed 100 percent advance payment for import of various goods against letter credit.
The SBP in a statement on Tuesday said that with a view to facilitate importers, SBP has allowed banks to make advance payment up to USD 10,000/-, or equivalent thereof, per invoice on behalf of commercial importers for import of raw material, spare parts and machinery.
Besides, SBP has also allowed banks to make payments on behalf of commercial importers for imports of raw materials and spare parts on Open Account.
In addition, SBP has also enhanced the existing limit of 50 percent advance payment, allowed to manufacturing concerns, for import of plant, machinery, spare parts and raw materials etc. against letter of credit, to 100 percent.
In December 2019, SBP allowed advance payment of up to 50 percent of the value of imports against letter of credit to manufacturing concerns for import of plant, machinery, spare parts and raw material etc.
After the implementation of a market based exchange rate system, the balance of payments has witnessed significant improvement. In the first six months of the current fiscal year, the current account deficit has contracted by 75 percent to US$ 2.15 billion.
This improvement is helping to further relax some of the restrictions on imports by SBP.
The latest measures, taken today, are in continuation of facilitating export-oriented industries and manufacturing concerns in the backdrop of ease of doing business and promoting exports’ growth.
These measures will further contribute in improving economic outlook of the country.
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SBP keeps policy rate unchanged at 13.25%
KARACHI: The State Bank of Pakistan (SBP) announced on Tuesday that it has decided to maintain the policy rate at 13.25%. SBP Governor Dr. Raza Baqir conveyed this decision, which was made during the Monetary Policy Committee (MPC) meeting. The SBP emphasized that the outlook for inflation remains steady, prompting the committee to retain the current monetary policy stance.
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Murtaza Syed appointed as SBP deputy governor
KARACHI: The federal government has officially appointed Dr. Murtaza Syed as Deputy Governor of the State Bank of Pakistan (SBP), in accordance with Section 10(4) of the SBP Act of 1956 (as amended), the central bank announced on Tuesday. Dr. Syed assumed his responsibilities at the SBP on January 27, 2020, bringing with him a wealth of experience in macroeconomic policy and research.
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Foreign exchange reserves increase to $18.271 billion
Pakistan’s liquid foreign exchange reserves saw a notable increase of $148 million, reaching a total of $18.271 billion by the week ending January 17, 2020, according to a statement released by the State Bank of Pakistan (SBP) on Thursday.
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SBP to announce monetary policy on January 28
The State Bank of Pakistan (SBP) is set to unveil its monetary policy for the upcoming two months on Tuesday, January 28, 2020, as confirmed by a statement released on Tuesday.
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