Pkrevenue.com

Tag: SBP

  • Reforms showing improvement in economy: SBP governor

    Reforms showing improvement in economy: SBP governor

    KARACHI: The reforms to address the macroeconomic challenges faced by the economy are now beginning to bear fruit and improvement in the external sector has become visible, said Dr. Reza Baqir, Governor, State Bank of Pakistan (SBP).

    “Restoring stability will promote investment in the country and thus economic growth,” the SBP governor said during an interactive session with leading foreign investors at the Overseas Investors Chamber of Commerce and Industry (OICCI). Governor was accompanied by the senior leadership of the SBP.

    The SBP governor noted that the bold measures taken in recent past were painful but necessary.

    He elaborated that the average monthly current account deficit, which has been a prime concern for the economy, has halved, export volumes have been growing, non-borrowed foreign exchange reserves have stopped falling and in fact begun to grow, and pressures on inflation are expected to recede from the second half of the current fiscal year.

    President OICCI, Shazia Syed, Vice President OICCI, Shazad G. Dada and Secretary General OICCI, M. Abdul Aleem, highlighted the significant economic contribution of foreign investors at OICCI, who are among the largest economic stakeholders and have invested over $13 billion in the past seven years and continue to have a positive view of the opportunities for investment despite the ongoing challenging economic environment in the country.

    OICCI shared with Dr. Reza Baqir the key highlights of its annual survey on remittances and complimented the Governor that despite extreme pressure on the FX reserves in the past twelve months, the SBP did not delay the remittance of profit, which was appreciated by the foreign investors.

    However, concerns on some other areas were raised and OICCI sought Governor’s support in facilitating different matters in the light of its policies towards improving ease of doing business in Pakistan.

    OICCI members presented a comprehensive list of recommendations to facilitate doing business in Pakistan including proposal for doing away with additional approvals for remittance which are as per registered contract, and proposed that an online portal be established allowing banks to upload the request and supporting documents.

    Dr. Reza Baqir appreciated the contribution of OICCI members to the national exchequer and announced various measures to further streamline the processes for improving ease of doing business.

    “SBP is moving towards digitalization and proactive engagement that will address the major issues systematically,” informed the Governor.

    He promised to consider various OICCI recommendations and agreed on the need for continuous dialogue with the OICCI members inviting the Managing Committee to meet the SBP’s leadership at regular intervals for timely resolution of the issues.

  • Investment in premium Rs40,000 prize bonds surges by 156 percent

    Investment in premium Rs40,000 prize bonds surges by 156 percent

    KARACHI: The investment in premium prize bonds of Rs40,000 denomination has sharply increased by 156 percent to Rs14.84 billion by August 2019 as compared with Rs5.78 billion in the same month of the last year.

    The significant increase in registered prize bonds of Rs40,000 denomination has been attributed to the announcement of the government to seize the issuance of unregistered instrument to stop expansion of black economy.

    In February this year the central bank stopped the issuance of Rs40,000 denomination prize bonds from its offices. The SBP also advised the Central Directorate of National Savings (CDNS) to stop printing the unregistered Rs40,000 prize bonds.

    A member of Tax Reform Committee (TRC), which was constituted by the former government in 2014 said that it was recommendation of the TRC to stop the circulation of high denomination prize bonds.

    The member said that the committee had presented its report in May 2015 and advised the then finance minister the high denomination prize bonds were major source for expansion of black economy.

    The TRC had recommended to document high denomination prize bonds of Rs25,000 and Rs40,000 and should be issued against CNICs of individuals.

    The government on June 24, 2019 announced to discontinue the circulation of Rs40,000 denomination bearer prize bonds.

    In compliance to the government announcement the SBP also issued instructions to banks. The central bank issued procedure for the banks to facilitate general public in exchanging the unregistered prize bonds with three different modes.

    The SBP said that the bearer prize bonds of Rs40,000 cannot be exchanged against cash. However, it can be redeemed against registered prize bonds or can be converted into national saving schemes or face value (direct transfer to the bank account of bond bolder).

    The SBP informed the banks that such prize bonds would not be sold after June 24, 2019 and will not be encashed/redeemed after March 31, 2020. No further draws of Rs40,000 denomination national prize bonds shall be held.

    The government is intending to expand the documented prize bonds in other denomination as well on the recommendations of the TRC, the member said.

    The TRC in its report pointed out: “Issuance of prize bond of Rs 25,000 or Rs 40,000 should be discontinued as these high denomination bearer instruments fuel corruption and tax evasion.”

  • Unregistered prize bonds worth Rs206 billion surrendered on discontinuation announcement

    Unregistered prize bonds worth Rs206 billion surrendered on discontinuation announcement

    KARACHI: An amount of around Rs206 billion has been surrendered following the government announcement of discontinuation the circulation of unregistered prize bonds of Rs40,000 denomination.

    According to information received to PkRevenue.com, the total investment in unregistered Rs40,000 denomination prize bonds fell to Rs52.46 billion by August-end 2019 as compared with Rs258 billion in May 2019.

    The government on June 24, 2019 announced to discontinue the circulation of Rs40,000 denomination bearer prize bonds.

    In compliance to the government announcement the State Bank of Pakistan (SBP) also issued instructions to banks. The central bank issued procedure for the banks to facilitate general public in exchanging the unregistered prize bonds with three different modes.

    The SBP said that the bearer prize bonds of Rs40,000 cannot be exchanged against cash. However, it can be redeemed against registered prize bonds or can be converted into national saving schemes or face value (direct transfer to the bank account of bond bolder).

    The SBP asked the banks that such prize bonds would not be sold after June 24, 2019 and will not be encashed/redeemed after March 31, 2020. No further draws of Rs40,000 denomination national prize bonds would be held.

    The SBP issued the following instructions regarding handling of Rs.40,000/- denomination National Prize Bonds are issued herewith for information, guidance and meticulous compliance:

    a) National Prize Bonds of Rs.40,000/- denomination shall not be sold after June 24, 2019 and will not be encashed/redeemed after March 31, 2020.

    b) No further draws of Rs.40,000/-denomination National Prize Bonds shall be held.

    c) Cash payment for encashments of bonds is not allowed. However, the bond holder (s) shall have the following options to replace / encash these bonds:

    1. Conversion of premium prize bonds (registered)

    2. Replacement with special saving certificate (SSC)/Defence Saving Certificate (DSC)

    3. Encashment at face value.

    d) Appended below is the SOP for processing requests under the aforementioned options for compliance by all banks:

    1. Conversion to Premium Prize Bonds (Registered)

    i. The bonds can be converted to premium prize bonds (registered) through the 16 field offices of SBP Banking Services Corporation, and authorized branches of six commercial banks i.e. National Bank of Pakistan (NBP), Habib Bank Limited (HBL), United Bank Limited (UBL), MCB Bank Limited (MCB), Allied Bank Limited (ABL) and Bank Alflah Limited (BAFL).

    ii. The bond holder shall be required to submit a written request for conversion of bearer bonds to premium prize bonds (registered) to be registered in his (her) name on the prescribed application.

    iii. The bond holder shall also be required to submit prescribed applications forms for registrations / purchase of premium prize bond as per the procedure in vogue.

    Replacement with the Special Saving Certificate (SSC)/Defence Saving Certificate (DSC)

    i. The bonds can be replaced with SSC / DSC through the 16 field offices of SBP Banking Services Corporation, authorized commercial banks and National Savings Centers.

    ii. All authorized commercial banks shall, therefore, accept requests for replacement of bearer bonds with SSC or DSC on the prescribed application form.

    iii. The bondholder shall also be required to submit application form for purchase of SSC/DSC (SC-1) as per the prescribed procedure.

    Encashment at Face Value:

    i. The bonds will only be encashed by transferring the proceeds to the bond holder’s bank account through the 16 field offices of SBP Banking Services Corporation as well as the authorized commercial bank branches.

    ii. All commercial banks shall receive requests for encashment of bearer bonds on the prescribed application form.

    A cop of the application form, duly signed and stamped, shall be provided to the bondholder as an acknowledgement receipt.

    The SBP said that it is needless to mention that the National Prize Bonds of Rs40,000 denomination tendered at the counters of banks shall be subject to through scrutiny to ascertain their genuineness. In this regard, details regarding the security features in Rs40,000 denomination National Prize Bonds are available online.

    Moreover, the prize bonds encashed / replaced by general public may be surrendered to concerned SBP BSC office through respective regional office of the commercial banks. For the purpose, the regional office may intimate the SBP BSC office three days in advance so that necessary arrangements for receipt of the bonds can be made.

    It is imperative to mention that a notice regarding the above / mentioned facilities must be displayed at prominent places within branch premises for awareness and information of general public.

  • SBP governor emphasizes on rapid digitization of payments; cash payments major hurdle in documentation of economy

    SBP governor emphasizes on rapid digitization of payments; cash payments major hurdle in documentation of economy

    KARACHI: Dr. Reza Baqir, Governor, State Bank of Pakistan (SBP) has said that cash payments are major hindrance in documentation of economy and stressed the need for rapid digitization of payment system.

    The SBP governor was addressing on Saturday at a workshop titled ‘Digital Payments Reforms’ organized by the central bank in collaboration with the World Bank at its headquarters in Karachi.

    Dr. Reza Baqir, highlighted the issues that have been longstanding and needed attention of all the stakeholders.

    The governor emphasized the need for rapid digitization of payments in order to realize the full benefits for the economy as cash is still the preferred mode of payments for our routine and day to day activities.

    He noted that the heavy reliance on cash and the limited use of digital channels reduces economic efficiency, hinders financial and economic development and impedes the goal of documenting the economy.

    To address these issues, he emphasized the importance of building a modern and robust payment system in the country that enables the provision of cost effective and easily available digital financial services to the general public. This, he stated is a key strategic objective of SBP.

    Governor Baqir shared SBP’s plans for leading an aggressive adoption and implementation of the National Payment Systems Strategy in the country.

    He emphasized that interoperability is key to achieving faster digitization goals. Governor also informed the participants that a new faster payment gateway will be launched next year to facilitate instant transfer of funds.

    He identified government payments and receipts and merchant payments to be the key elements in accelerating digitization of payments in the country.

    He also noted the need for reducing the high cost, especially the interchange fee in the payments industry and emphasized to all stakeholders to work collaboratively for increasing digital access points in the country.

    The objective of the workshop was to share the draft National Payment Systems Strategy and solicit the input of key stakeholders involved in its implementation.

    The workshop was attended by senior officials from PTA, NADRA, SECP, FBR, the PM office’s Strategic Reforms and Implementation Unit, Banks, Telcos, Electronic Money Institution (EMIs), PSO/PSPs and Fintechs.

    Governor SBP, Dr. Reza Baqir led the workshop, while Chairman PTA, Major General (Retired) Amir Azeem Bajwa, and Country Director World Bank, Illango Patchamuthu were also present at the occasion.

    Stakeholders who attended the meeting shared valuable suggestions for increasing the pace of digitization of payment system. The discussion led to the identification of a number of next steps for the group.

    At the conclusion of the meeting, Governor Baqir thanked the participants for their concrete and specific suggestions which would help improve the development and implementation of the National Payment Systems Strategy.

  • SBP imposes Rs1,123 million penalty on commercial banks for violating rules, regulations

    SBP imposes Rs1,123 million penalty on commercial banks for violating rules, regulations

    KARACHI: State Bank of Pakistan (SBP) has imposed penalty to the tune of Rs1,123 million during first quarter (July – September) of current fiscal year 2019/2020 for violating rules and regulations.

    The SBP has taken penal action against three banks for violating procedures in the areas of Know Your Customer (KYC) and Customers Due Diligence (CDD) and imposed fine to the tune of Rs133.32 million during the month of September 2019, the central bank said on Friday.

    The SBP imposed penalty of Rs56.61 million on Askari Bank, Rs63.805 million on Meezan Bank Limited and Rs12.906 million on MCB Islamic Bank Limited.

    In addition to penal action, the banks have been advised to strengthen its process related to KYC/CDD, in order to avoid occurrence of similar violations in future.

    The SBP imposed penalty amounting Rs805.1 million on 10 banks for violating anti-money laundering, due diligence of customers and foreign exchange regulations during the month of August 2019.

    The central bank issued details on Friday about action taken by the SBP against banks in order to plug loopholes in the banking system.

    The SBP initiated to make public the action taken by the central bank from July 2019 against commercial banks for violating prevailing rules and regulations and amount of penalty imposed on such banks.

    In the latest release of enforcement measures by the SBP also included action against leading banks including Habib Bank Limited and MCB Bank etc.

    The highest amount of penalty of Rs320.08 million has been imposed on Habib Bank Limited followed by MCB Bank of Rs159.152 million, Dubai Islamic Bank of Rs77.97 million.

    Following of are the significant enforcement actions by SBP during August-2019.

    01. Dubai Islamic Bank dated August 01 & 02, 2019:

    Violations in the areas of AML/CFT, Asset Quality

    Monetary penalty of Rs77.974 million was imposed mainly on deficiencies in the areas of AML/CFT. Moreover the bank has been advised timelines to rectify the operational lapses and improve the control environment to avoid recurrence of such lapses/violations in future.

    02. Habib Bank Limited dated August 02 & 03, 2019:

    Violations in the areas of AML/CFT, Consumer Protection

    Monetary penalty of Rs320.08 million was imposed mainly on deficiencies in the areas of AML/CFT and erroneous deduction of service charges from customers. The bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such lapses/violations in future.

    03. MCB Bank Limited dated August 03, 2019:

    Violations in the areas of AML/CFT, Asset Quality

    Monetary penalty of Rs159.152 million was imposed mainly on deficiencies in the areas of AML/CFT. The bank has been advised timelines to improve the KYC/CDD processes and integrate eKYC system with core banking system.

    04. Silkbank Limited dated August 03, 2019:

    Violations in the areas of AML/KYC, Asset Quality

    Monetary penalty of Rs53.879 million was imposed mainly on violations of non-surrendering of unclaimed deposits, non-classification of loans and adjustment lending. Moreover, the bank has been advised timelines to classify advances & create provision there against and conduct

    05. Bank Alfalah Limited dated August 03, 2019

    Violations in the areas of FX Operations

    Monetary penalty of Rs52.795 million was imposed mainly on violations of foreign exchange regulations such as restrictions to remit import advance payments, export documentation and non-submission of documents against advance payments.

    06. Allied Bank Limited dated August 03, 2019

    Violations in the areas of AML/KYC, Asset Quality

    Monetary penalty of Rs32.755 million was imposed on breach of various limits of Equity Investment/related party and deficiencies in customer due diligence process. The bank has been advised timelines to bring equity Investment and exposure to related party group within the prescribed limit and revise KYC/CDD process.

    07. Sindh Bank Limited dated August 03, 2019

    Violations in the areas of AML/KYC, Asset Quality, FX Operations

    Monetary penalty of Rs15.088 million was imposed mainly on deficiencies in customer due diligence practices, imprudent lending practices, non-classification of loans. Moreover, in view of the strategic deficiencies in Transaction monitoring system & name screening process, the bank has been advised an action plan/timelines for replacement of their existing TMS and acquiring of name screening solution.

    08. Summit Bank Limited dated August 03, 2019

    Violations in the areas of AML/KYC, Asset Quality

    Monetary penalty of Rs13.072 million was imposed mainly on deficiencies in customer due-diligence process, mis-utilization of loans and non classification of loans. The bank has been advised to timely update customer profiles & properly document the reasons of large value transactions.

    09. JS Bank Limited dated August 05, 2019

    Violations in the areas of AML/KYC, Asset Quality, Corporate Governance

    Monetary penalty of Rs70.307 million was imposed mainly on deficiencies in customer due-diligence process, mis-utilization and non classification of loans etc. The bank has been advised timelines to enhance its systems/process for customer risk profiling (CRP), transaction monitoring and identification of Politically Exposed Persons (PEPs).

    10. Habib Metropolitan Bank Limited dated August 19, 2019

    Violations in the areas of FX Operations

    Monetary penalty of Rs10 million was imposed mainly on a violation of foreign exchange regulations relating to splitting of the import advance payments into smaller transactions.

    The SBP imposed penalty of Rs184.64 million upon four commercial banks for violating laws related to Anti-Money Laundering (AML)/Know Your Customer (KYC) during the month of July 2019.

    The central bank on Thursday said that these penalty amount was imposed during the month of July 2019 against banks included: The Bank of Punjab; JS Bank Limited, Bank Al Habib Limited and Soneri Bank.

    The SBP imposed penalty of Rs13.072 million against The Bank of Punjab on July 15, 2019 for violating in areas of foreign exchange operations.

    In addition to penal action, the bank has been advised to improve its internal processes, the SBP said.

    The Bank of Punjab was again penalized with Rs16.119 million on July 18, 2019 for violating in areas of AML/KYC, unclaimed deposits.

    In addition to penal action, the bank has been advised for improvements in the areas of AML/KYC, the central bank added.

    The SBP penalized JS Bank Limited with penalty amount of Rs48.211 million on July 23, 2019 for violating in areas of AML/KYC.

    In addition to penal action, the bank has been advised to conduct a thorough review of relationship accounts, the SBP said.

    The SBP imposed penalty of Rs51.75 million upon Bank Al Habib Limited on July 25, 2019 for violating in areas of AML/KYC, FX Operations.

    In addition to penal action, the bank has been advised to update its systems and processes, and provide appropriate trainings to the concerned officials, the SBP said.

    The SBP imposed penalty of Rs55.48 million upon Soneri Bank Limited on July 25, 2019 for violating in areas of AML/KYC, Asset Quality, FX Operations.

    In addition to penal action, the SBP advised the bank to improve areas of AML/KYC and credit risk monitoring.

  • Pakistan’s foreign exchange reserves fall by $769 million to $15 billion

    Pakistan’s foreign exchange reserves fall by $769 million to $15 billion

    KARACHI: Pakistan’s total foreign exchange reserves declined by $769 million to $15 billion by week ended September 27, 2019, State Bank of Pakistan (SBP) said on Thursday.

    The total foreign exchange reserves of Pakistan declined by $768.9 million to $15.003 billion by week ended September 27, 2019 as compared with $15.772 billion a week ago.

    The official reserves held by the SBP came down by $723.7 million to $7.741 billion by week ended September 27, 2019 as compared with $8.465 billion a week ago.

    The SBP said that its official reserves were declined due to foreign debt repayment.

    The reserves held by commercial banks also fell by $45.2 million to $7.262 billion as compared with $7.307 billion a week ago.

    The foreign exchange reserves hit record high of $23.084 billion on week ended July 01, 2016.

  • Banks directed to adopt standard QR codes for payments in Pakistan

    Banks directed to adopt standard QR codes for payments in Pakistan

    KARACHI: State Bank of Pakistan (SBP) has directed all commercial banks and other financial institutions to adopt EMVCo’s EMV QR Code Specifications for Payment Systems (QRCPS).

    The SBP said that Quick Response (QR) Codes have been emerging as low cost payment acceptance alternative to Point of Sale (POS) terminals in Pakistan, especially for small merchants.

    Although QR codes have been deployed in substantial numbers, the volume of transactions has not achieved desired levels primarily due to their lack of interoperability.

    Therefore, as a first step towards achieving interoperability of Payment QR Codes in Pakistan, SBP after extensive stakeholder consultations has decided that henceforth all Institutions issuing and/or acquiring QR codes for payments in Pakistan shall adopt EMVCo’s EMV QR Code Specifications for Payment Systems (QRCPS).

    Further, non-EMV QR Codes already deployed in Pakistan shall comply with this standard by 31st March, 2020.

    The SBP said that institutions issuing/acquiring QR Codes shall also ensure:

    Compliance with branding guidelines for QR Codes displayed at merchant locations (attached at Annexure-A).

    Data related to issuance and usage of QR codes, as per Annexure-B, is submitted on quarterly basis to Payment Systems Department (PSD) within a fortnight of quarter end.

    Compliance of SBP’s instructions, guidelines, rules and regulations on Consumer Protection and Dispute Resolution issued and amended from time to time.
    Further, institutions acquiring QR Codes are also encouraged to:

    Promote innovative uses of QR codes like invoice/challan based payments, branch based Inter-bank Fund Transfers (IBFT) etc.; and

    Plan for achieving inter scheme interoperability in due course of time.

  • Pakistan’s forex reserves decrease by $125 million

    Pakistan’s forex reserves decrease by $125 million

    KARACHI: The liquid foreign exchange reserves of the country fell by $125 million to $15.773 billion by week ended September 20, 2019, State Bank of Pakistan (SBP) said on Thursday.

    The total foreign exchange reserves of the country a week ago were at $15.898 billion.

    The foreign exchange reserves held by the SBP declined by $135 million to $8.465 billion by week ended September 20, 2019 as against $8.6 billion a week ago.

    The SBP said that the reserves were declined due to external debt payments.

    The reserves held by commercial banks, however, increased by $10 million to $7.307 billion as compared with $7.297 billion a week ago.

    Related Stories

    Pakistan foreign exchange reserves increase by $148 million to $15.898 billion

  • Banks to observe extended working hours on Sept 30 for tax collection: SBP

    Banks to observe extended working hours on Sept 30 for tax collection: SBP

    KARACHI: The State Bank of Pakistan (SBP) on Thursday said the banks will observe extended working hours on September 30, 2019 to facilitate collection of duty and taxes on the last day of first quarter of current fiscal year

    In order to facilitate the collection of Government receipts / duties / taxes, it has been decided that authorized branches of National Bank of Pakistan (NBP) as well as field offices of SBP Banking Services Corporation (SBP-BSC) shall observe extended banking hours upto 9:00 P.M. on September 30, 2019 (Monday), the SBP said.

    Accordingly, NBP branches will settle their transactions with respective SBP-BSC field offices on the same day i.e. September 30, 2019 for which purpose a special clearing has been arranged at 7:00 P.M. by the NIFT, it added.

    All banks are, therefore, advised to keep their concerned branches open on September 30, 2019 (Monday) till such time that is necessary to facilitate the special clearing for Government transactions.

  • Complete record of destruction of banknotes available: SBP

    Complete record of destruction of banknotes available: SBP

    KARACHI: State Bank of Pakistan (SBP) on Tuesday said it has all the records related to destructed old design Rs500 banknotes. The central bank also denied media report about record missing of such banknotes.

    In a statement, the SBP said that apropos news item appearing in a section of media regarding unavailability of record pertaining to destruction of old design Rs.500 banknotes.

    “The SBP categorically denies and rejects the media reports regarding unavailability of the record of old design Rs.500 banknotes demonetized in Oct 2012.”

    The destruction of banknotes is an ongoing activity and is carried out across the country at field offices of SBPBSC, the record for the same is available in respective field offices.

    “The Audit team however, just visited SBPBSC Karachi and assumed that the record available at Karachi is the total record available with the SBP, which is factually incorrect,” the SBP said.

    “The complete record of banknote’s destruction is available at SBPBSC field offices located in 16 cities across the country,” it added.