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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Banks asked to ensure compliance in collection of donations for Dam Fund
KARACHI: State Bank of Pakistan (SBP) on Monday said any laxity by banks in collection of donations for Dam Funds will tantamount to contempt of court.
“The apex court of the country [Supreme Court of Pakistan] is monitoring progress in the matter of donations to the Fund. Any laxity by banks or their staff at branches will attract penal action and may also tantamount to contempt of court,” the SBP said.
The banks are therefore, advised to ensure meticulous compliance of above instructions and extend full cooperation to donors in deposit of their donations/contributions, the SBP added.
The central bank said that in a recent hearing of the subject case, the Honorable Supreme Court of Pakistan has observed that there are complaints that banks are not accepting donations from people contributing to the Dam Fund, and are also not actively facilitating donors in remittance of the funds stuck abroad.
In order to address the issues being faced by donors, banks are advised to ensure that the arrangements made for collection of donations and contributions to the Dam Fund shall remain in place at every bank branch on an ongoing basis; requiring all concerned to provide necessary support and facilitation to donors.
The banks are further directed to ask their overseas branches to facilitate the donors in depositing and remittance of donations to the Fund in accordance with the legal and regulatory framework of concerned jurisdiction.
The banks shall display SBP’s helpline number and email address on their websites and branch notice boards for lodging of complaints by donors if they face any difficulty in depositing and contributing to the Fund.
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Current account deficit narrows by 75% in July – December
KARACHI: The current account deficit has narrowed by 75 percent during first half (July-December) 2019/2020 owing to significant inflows and reduction in trade deficit.
According to statistics of Balance of Payment (BoP) issued by State Bank of Pakistan (SBP) on Monday, the current account deficit reduced to $2.153 billion in first six months of current fiscal year as compared with the deficit of $8.614 billion in the corresponding period of the last fiscal year.
The trade deficit fell by 30 percent to $11.69 billion during first half of current fiscal year as compared with the deficit of $16.77 billion in the same half of the last fiscal year, according to data issued by Pakistan Bureau of Statistics (PBS).
The imports fell by 17 percent to $23.23 billion during July – December 2019 as compared with $27.95 billion in the corresponding period of the last fiscal year.
However exports witnessed 3.15 percent growth to $11.53 billion in the first half of current fiscal year as compared with $11.18 billion in the corresponding period of the last fiscal year.
The overseas Pakistanis sent $11.39 billion in first half of the current fiscal year as compared with $11.03 billion in the corresponding period of the last fiscal year.
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Foreign exchange reserves increase to $18.123 billion
KARACHI: The foreign exchange reserves of the country have increased by $39 million to $18.123 billion by week ended January 10, 2020 as compared with $18.084 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.
The reserves held by the central bank increased by $83 million to $11.586 billion by week ended January 10, 2020 as against $11.503 billion a week ago.
The reserves held by commercial banks fell by $44 million to $6.537 billion as against $6.581 billion on weekly basis.
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Foreign direct investment increases by 68.3% in first half
KARACHI: The foreign direct investment (FDI) into Pakistan has increased by 68.3 percent during first six months (July – December) of 2019/2020 owing to lower outflows during the period, according to data released by State Bank of Pakistan (SBP) on Thursday.
The FDI increased to $1.34 billion during first six months of current fiscal year as compared with $796.8 million in the corresponding months of the last fiscal year.
The inflows under the head were at $1.71 billion during the period under review as compared with $1.84 billion in the same period in the last fiscal year.
The outflows were at $391.2 million during first half of the current fiscal year as compared with $1.05 billion in the corresponding half of the last fiscal year.
The portfolio investment in the equity market witnessed increased by $18.8 million in July – December 2019/2020 as compared with outflows of $419.8 million in corresponding period of the last fiscal year.
The total foreign private investment surged by 260.6 percent to $1.36 billion during the first half of the current fiscal year as compared with $377 million in the same half of the last fiscal year.
During the period under review an investment of $452 million was witnessed in the debt securities as foreign public investment.
The total foreign investment increased to $1.81 billion during first six months of current fiscal year as compared with $377 million in the corresponding months of the last fiscal year.
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SBP imposes penalty on five banks for violation
KARACHI: State Bank of Pakistan (SBP) has imposed monetary penalty on five banks including Summit Bank, Habib Metropolitan Bank, MCB Bank, National Bank of Pakistan and Bank Alfalah for violating regulatory environment.
The central bank on Tuesday issued significant enforcement measures by imposing monetary penalty on banks for violating rules, regulations and other regulatory environment.
The SBP imposed Rs219.138 million as penalty on five banks during the month of December 2019 for violating mainly regulations related to foreign trade operations, Customers Due Diligence (CDD) and Know Your Customer (KYC).
The SBP from July 2019 started public disclosure of penal action against banks. “Enforcement actions are an integral part of regulatory regime which involves imposition of monetary penalties and other actions against institutions and individuals for violations of laws, rules, regulations, guidelines or directives issued by SBP from time to time,” according to a circular issued by the central bank.
In order to bring more transparency and strengthen market discipline, SBP has decided to publicly disclose significant enforcement actionsWith the latest penal action the total amount of penalty during first six months (July – December) 2019 increased to Rs1,569 million.
According to the highlights of significant enforcement actions by the SBP during December 2019, the central bank imposed Rs219.138 million as monetary penalties.
The central bank on December 11, 2019 imposed penalty amount of Rs17.422 million on Summit Bank Limited for procedural violations in the area of foreign exchange operations.
“Monetary penalty was imposed on deficiencies in the area of foreign trade operations,” the SBP said.
The central bank on December 11, 2019 imposed an amount of Rs34.578 million on Habib Metropolitan Bank Limited for violating CDD/KYC.
“In addition to penal action, the bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such violations in future.”
The SBP on December 12, 2019 imposed penalty of Rs49.499 million on MCB Bank Limited for procedural violations in the area of foreign exchange operation.
“Monetary penalty was imposed on deficiencies in the area of foreign trade operations.”
The SBP on December 18, 2019 imposed monetary penalty of Rs21.544 million on National Bank of Pakistan for violating CDD/KYC.
“In addition to penal action, the bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such violations in future.”
The SBP on December 23, 2019 imposed monetary penalty of Rs96.095 million on Bank Alfalah Limited for violating KYC/CFT.
“In addition to penal action, the bank has been advised to conduct an internal inquiry on certain breaches/violation of regulatory requirements. Further, the bank has been advised to strengthen its process related to KYC/CDD, in order to avoid recurrence of such violations in future.”
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Rs40,000 bearer prize bonds allowed conversion up to March 31
KARACHI: People can surrender Rs40,000 denomination bearer prize bonds by March 31, 2020 and exchange the amount with registered bonds or other given options.
The SBP stopped the issuance of Rs40,000 denomination prize bonds on June 24, 2019 and given deadline of March 31, 2020 for exchange the such denomination with other registered mode of investment.
Since the announcement of the central bank, the holders of bearer bonds had surrendered around Rs238 billion till November 2019.
The total investment Rs40,000 denomination bearer bonds peaked at Rs258 billion by May 2019, which reduced to around Rs20 billion by November 2019.
SBP stops banks selling Rs40,000 prize bonds, issues procedure for conversion into registered bonds
The SBP in a notification issued in June 2019 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:
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 copy 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.