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  • Housing loan: SBP launches complaint resolution portal

    Housing loan: SBP launches complaint resolution portal

    KARACHI: The State Bank of Pakistan (SBP) has launched a compliant resolution portal in order to resolve complaints of potential customers under Markup Subsidy Scheme for affordable housing initiated by the government.

    Prime Minister Imran Khan chaired a meeting of National Coordination Committee on Housing, Construction and Development (NCCHCD) in Islamabad on Thursday.

    Governor State Bank, Dr. Reza Baqir, presented key features of an online complaint resolution mechanism developed by the SBP to resolve complaints of potential customers under Government’s Markup Subsidy Scheme for affordable housing.

    The prime minister appreciated the development of a user friendly and comprehensive complaint resolution mechanism to assist common persons who would like to borrow under this Scheme.

    The complaint resolution mechanism comprises an IT based portal supported by a comprehensive network of State Bank and commercial bank staff to take care of problems faced by applicants of low cost and affordable housing finance.

    The IT portal has been made live for registration of complaints. This major initiative will help financially excluded low and middle-income segments who often find it difficult to access the formal financial sector, which is a key goal of the SBP.

    The system will help in resolving complaints within a predefined timeline with proper escalation mechanism.

    The potential customers can already access existing systems and procedures of banks for resolution of their complaints. The complaint resolution mechanism developed by State Bank is a move to improve effectiveness and transparency in complaint redressal process.

    In line with Government’s vision of making housing finance affordable, State Bank has, on October 12, 2020, issued Government’s Mark-up Subsidy for Housing Finance to facilitate provision of subsidized finance to low and middle-income individuals.

    The features of Markup Subsidy Facility can be seen at https://www.sbp.org.pk/smefd/circulars/2020/C11.htm.

    The State Bank is making efforts with the support of banking industry to ensure that the benefits of the markup subsidy scheme reaches targeted customers of banks who currently do not own a house.

    On the advice of State Bank of Pakistan, the banks have designated around 50% of their branches for provision of financing under this facility. With this, more than 7,700 branches of banks across the country have been designated to process financing of approaching customers under this scheme, while rest of the branches in the network will act as referral points for the designated branches.

    With the launch of portal, customers can now register their concerns by simply putting minimum details on the online service portal accessible at https://servicedesk.sbp.org.pk/.

    A short video is also available on this portal to explain how complaints may be lodged and followed up. In case applicants face difficulties in using this portal or need further clarification they are welcome to visit the offices of SBP BSC in 15 major cities where special Help Desks are available to guide and assist, list of offices is available at https://www.sbp.org.pk/sbp_bsc/FieldOff.asp.

    In order to facilitate resolution of complaints received under the Markup Subsidy Service Portal, State Bank has created a network of regional focal persons in State Bank BSC regional offices. The banks have also nominated their regional focal persons across the regions in the country where State Bank offices are present.

    To ensure the complaint resolution mechanism resolves issues in a timely manner, it is going to be monitored at the highest level within the State Bank. Low cost housing finance customers are encouraged to record their complaints if they experience any difficulty in their loan application with commercial banks.

  • Foreign exchange reserves fall by $399 million to $20.12 billion

    Foreign exchange reserves fall by $399 million to $20.12 billion

    KARACHI: The liquid foreign exchange reserves of the country fell by $399 million to $20.12 billion by week ended January 15, 2021, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.519 billion by week ended January 08, 2021.

    The official reserves of SBP also fell by $386 million to $13.014 billion by week ended January 15, 2021 as compared with $13.4 billion a week ago.

    The central bank attributed the decline in reserves to external debt repayments.

    The reserves held by commercial banks also eased by $13 million to $7.106 billion by week ended January 15, 2021 as compared with $7.119 billion a week ago.

  • SBP directs banks to facilitate taxpayers in e-payment of duty, taxes

    SBP directs banks to facilitate taxpayers in e-payment of duty, taxes

    KARACHI: The State Bank of Pakistan (SBP) on Thursday directed banks to facilitate taxpayers in their payments of duty and taxes through digital/electronic (e-payment) system.

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  • Current account posts $662 million deficit in December

    Current account posts $662 million deficit in December

    Pakistan’s balance of payments recorded a current account deficit of $662 million in December 2020, breaking a streak of five consecutive months of surplus, according to data released by the State Bank of Pakistan (SBP) on Wednesday.

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  • SBP likely keep policy rate unchanged at 7 percent: market poll

    SBP likely keep policy rate unchanged at 7 percent: market poll

    KARACHI: The financial market is expecting that the central bank may keep policy rate unchanged at 7 percent in its monetary policy announcement scheduled for January 22, 2021.

    According to a poll conducted by Topline Securities, about 75 percent of financial market participants are expecting the State Bank of Pakistan (SBP) would keep the policy rate unchanged.

    A total of 94 participants took part in the latest poll, compared to 72 in November 2020 poll which was conducted for November 2020 Monetary Policy Statement (MPS).

    Of the 94 participants, 75 percent expect no change in the policy rate in the January 22, 2021 MPS. Around 88 percent expected no change in November 2020 poll.

    About 19 percent of the participants are expecting increase in the policy rate. About 10 percent are expecting increase of 100-150bps. In last the poll, only 7 percent of the participants were expecting an increase in the policy rate.

    With respect to monetary tightening in 2021, 58 percent of the participants expect monetary tightening to begin in 1H2021 (12 percent in January, 21 percent in March and 25 percent in May). About 26 percent expect monetary tightening to begin in 2H2021, while 17 percent do not anticipate a rate hike in 2021.

    The analysts at the Topline Securities are also expecting no change in the policy rate in the January 2021 MPS, while they expect increase in policy rate by 100 basis points in May/July 2021. 

    The analysts believe change in views towards increase in the policy rate of the participants is owing to (1) likely restoration of IMF program over next couple of weeks wherein energy tariffs are likely to be adjusted upwards and (2) rising international oil and commodity prices (sugar, scrap, palm oil etc.).

    While CPI inflation in January 2021 is likely to fall to around 6 percent YoY because of a high base effect, it is likely to come in at 9.5-10.0 percent during the 2Q2021.

    The analysts at Arif Habib Limited are also expecting the SBP to keep policy rate unchanged at 7.00 percent in the upcoming monetary policy statement.

    This is backed by their view on:

     i) Inflation, which is expected to remain contained in short-to-medium term. Food inflation has started to ease off with essential food items’ prices (staple goods mainly). Government’s efforts to tackle supply side issues have slowed down the momentum of food prices as per recent SPI data. These measures along with high base effect should help keep inflation under check. Moreover, core inflation also has remained stable owing to subdued demand.

     ii) As the economy is currently hit by the ‘second wave’ of the pandemic, therefore, reviving the aggregate demand remains a challenge. Taking this into consideration, SBP might consider keeping the rate as it is despite running a negative interest rate of around 2 percent.

     iii) Moreover, it seems the fixed income market is also signaling towards unchanged stance as there was no major change in the treasury bills yields of 3-month and 6-month in the recent auction (on January 13, 2021) which were at 7.17 percent and 7.20 percent.

    To recall, the Monetary Policy Committee (MPC) convened last meeting in November 2020 and noted that since its last meeting in September 2020, further improvement has been witnessed in the overall domestic recovery, which aided business confidence. Growth expectations have thus far remained in-line with the previously forecasted 2 plus percent for FY21. Some factors that helped the recovery momentum to continue included recent revival in high frequency activity indicators such as cement, steel and autos, government’s fiscal stimulus, and SBP’s several measures.

  • SBP to review 7pc policy rate on January 22

    SBP to review 7pc policy rate on January 22

    KARACHI: The State Bank of Pakistan (SBP) on Tuesday said that it will review the existing key policy rate at 7 percent on January 22, 2021.

    The SBP said that the Monetary Policy Committee of the SBP will on Friday, January 22, 2021 at SBP Karachi to decide about Monetary Policy.

    Governor State Bank of Pakistan, Dr. Reza Baqir, will give a press conference on the same day after the MPC meeting.

    The SBP in its MPC meeting on November 23, 2020 decided to maintained policy rate at 7 percent.

    The SBP decided to maintain policy rate noted that since the last meeting in September, the domestic recovery has gradually gained traction, in line with expectations for growth of slightly above 2 percent in FY21, and business sentiment has improved further.

    Nevertheless, there are risks to the outlook. The recent rise in Covid cases in Pakistan and many other countries presents considerable downside risks.

    On the upside, while it could take some time to fully implement worldwide, there has been recent encouraging news on vaccine development.

    On the inflation front, recent out-turns have been on the higher side, primarily due to increases in food prices. However, these supply-side pressures are likely to be temporary and average inflation is expected to fall within the previously announced range of 7-9 percent for FY21.

    Taken together, risks to the outlook for both growth and inflation appear balanced.

  • Foreign investment drops by 72 percent in first half

    Foreign investment drops by 72 percent in first half

    KARACHI: The inflow of foreign investment into Pakistan has dropped by 72 percent during first half (July – December) of fiscal year 2020/2021 due to outflows from debt securities and equity market.

    The total foreign investment fell to $514.5 million during first half of the current fiscal year as compared with $1.83 billion in the corresponding half of the last fiscal year, State Bank of Pakistan (SBP) said on Monday.

    Foreign private investment – the major component of total foreign investment into the country – fell by 48.5 percent during the first half of the current fiscal year. The foreign private investment declined to $708 million during July – December 2020/2021 as compared with $1.37 billion in the corresponding period of the last fiscal year.

    The total foreign direct investment (FDI) fell by 30 percent to $953 million during the half under review as compared with $1.35 billion in the corresponding half of the last fiscal year.

    The investment in capital market witnessed outflow of $244 million during the first half of the current fiscal year as compared with inflow of $18.8 million in the same half of the last fiscal year.

    The investment in debt securities also witnessed outflow of $194 million during July – December 2020/2021 as compared with inflow of $452 million during the same period of the last fiscal year.

  • Bank deposits hit a record high at Rs17.87 trillion

    Bank deposits hit a record high at Rs17.87 trillion

    KARACHI: Deposits of the banking system have reached a record high of Rs17.87 trillion owing to higher remittances and lack of cash-based business activities, analysts said on Thursday.

    The deposits hit a record high to Rs17.87 trillion by end of December 2020 after posting an increase of 22.14 percent when compared with Rs14.63 trillion by the end of December 2019, according to data released by the State Bank of Pakistan (SBP).

    According to the analysis of Topline Securities, the growth in deposits has been fueled by higher remittances (+17.5 percent YoY in USD and 27.5 percent YoY in PKR terms during 11M2020), while lack of business activity due to COVID-19 (cash-based) may have also increased bank deposits.

     Investments have grown by 31 percent to Rs11.5trn in 2020. At the start of the year, the high yield on offer had already lured banks to move towards investments, which was compounded further as COVID-19 hit strangling business activity and in turn loan growth.

     Advances grew by just 2 percent in 2020 as banks remained wary of overall economic conditions due to COVID-19. However, the last quarter of 2020 for Advances has been relatively better with 3.4 percent QoQ growth. The aggressive cuts in interest rates by the Pakistan Central Bank since Mar-2020 may be starting to reap fruits as the impact of the COVID-19 pandemic also lowers and economic activity picks up.

    Investment to Deposit Ratio (IDR) had already depicted an improvement to 67 percent in Sep-2020, which has been maintained at year-end. To recall this was 66 percent in Jun-2020 and 60 percent in Dec-2019. 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. ADR has dropped to 48 percent from 49 percent in Sep-2020 (to recall, this was at 51 percent in Jun-2020 and 56 percent in Dec-2019).

     Provisioning has also seen a substantial increase as banks have opted to increase General Provisioning in the wake of COVID-19, however, the last quarter has seen provisions stabilizing as the banks feel that they have adequately provided for up until Sep-2020.

    M2 growth clocked in at 16 percent in 2020 primarily driven by the stellar deposit growth this year and a 19 percent increase in Currency in Circulation (CIC). CIC increased to Rs6.30trn by the end of December 2020, with CIC as a percent of M2 clocking in at 29 percent, above the past 5-year average of 27 percent. Reasons for increasing CIC can be attributed to low-interest rates and evasion from tax authorities.

    Going forward, we expect Deposit growth in the range of 12-14 percent during 2021E, while we expect Advances to grow by around 4-6 percent, where banks are expected to remain risk-averse given concerns over further waves of COVID-19.

  • Country’s foreign exchange reserves inch up

    Country’s foreign exchange reserves inch up

    KARACHI: The liquid foreign exchange reserves of the country slightly increased by $7 million to $20.519 billion by the week ended January 08, 2021, the State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.512 billion by the week ended December 31, 2020.

    The official reserves of the SBP slipped by $12 million to $13.4 billion by the week ended January 08, 2021, as compared with $13.412 billion a week ago.

    The foreign exchange reserves maintained by the commercial banks increased by $19 million to $7.119 billion by the week ended January 08, 2021, as compared with $7.1 billion a week ago.

  • SBP assures no limit to e-payment for duty, taxes

    SBP assures no limit to e-payment for duty, taxes

    KARACHI: State Bank of Pakistan (SBP) has assured that there will be no limit to electronic payment for duty and taxes.

    The SBP assured this at a meeting with office bearers of Karachi Customs Agents Association (KCAA), a statement said on Monday.

    The KCAA said that from January 20, 2021 the collection of custom duties and taxes of more than one million rupees will be collected through e-payment. The e-payment system shall provide round the clock facility to the taxpayers for their payments.

    It said that on the request of KCAA, a comprehensive joint meeting has been conducted by the SBP through video link on Zoom Cloud headed by the Director Finance Department of State Bank of Pakistan and attended by more than 60 Regional Heads of all designated Banks and KCAA’s delegation was held on January 07, 2021 at 3:00 PM, wherein the issues pertaining to banking sectors were discussed.

    In order to facilitate the trade and taxpayers the following decisions were taken by the competent authorities of SBP in the said meeting.

    It was decided that for the payment of Custom Duties and Taxes, any amount can be paid through cheque in any branch of same bank alongwith PSID instead of following the process for issuance of Pay Order.

    However in case any variation, the excess/additional amount of taxes will be collected through cash or in case the taxes amount is less than of the cheque amount, the excess amount will be deposited in the account of taxpayers just like PD Account.

    The KCAA highlighted that few banks have different limits for account holders and they do not allow payment of duty and taxes of more than their assigned / authorized limits through the module of e-payment.

    It was agreed by the State Bank of Pakistan that no capping /limit will be fixed in future, the taxpayers and stakeholders can paid their customs duties and taxes without having any limits.

    KCAA also pointed out that Corporate Customers do not have ATM Cards, Mobile Apps and Internet Banking, hence they are unable to pay On-Line payment for duty and taxes. Particularly the corporate sector does not even have access for On-Line Banking and they have to make payments through conventional method of submitting pay orders or cheques.

    Corporate Sector who are willing to make e-payment for duty and taxes should have 24 / 7 module for facilitation of payments. In this regard it was decided by the SBP that in near future all such facilities will be provided to the corporate sectors. Few Bank like Standard Chartered, Samba Bank etc already providing net Banking to corporate sectors

    It has been observed that while custom duties and taxes paid through E-Payment the acknowledgement of payment challan are delayed for 2 to 3 days.

    Now the matter has been resolved, the acknowledgment payment challan will be generated on real time basis.