KARACHI: Pakistani workers living abroad have sent $2.52 billion as remittances to their homeland in the month of October 2021, State Bank of Pakistan (SBP) said on Sunday.
The SBP said that the workers’ remittances continued their strong streak as inflows recorded $2.5 billion in October 2021, up 10.2 percent (y/y) and only marginally lower compared to last month (5.7 percent).
In addition to remaining above $2 billion since June 2020, this is the eighth consecutive month when remittances have been close to or above $2.5 billion.
On a cumulative basis, remittances have risen to $10.6 billion during the first four months of FY22 (July-October 2021), which is 11.9% higher than the same period last year.
Remittance inflows during the first four months of FY22 have mainly been sourced from Saudi Arabia ($ 2.7 billion), UAE ($ 2.0 billion), UK ($ 1.5 billion) and USA ($ 1.1 billion).
Proactive policy measures by the Government and SBP to incentivize the use of formal channels and altruistic transfers to Pakistan amid the pandemic have positively contributed towards the sustained improvement in remittance inflows since last year.
The SBP decided to increase the average (CRR), to be maintained during a period of two weeks by scheduled banks, from 5 percent to 6 percent and minimum CRR to be maintained each day from 3 percent to 4 percent.
CRR is the amount of money that banks are required to keep with State Bank of Pakistan and is applicable on demand liabilities and time liabilities with tenor of less than a year.
Time liabilities with tenor of more than one year shall continue to be exempted from maintenance of cash reserves.
With the economy recovering briskly from last year’s acute Covid shock, there is a need to gradually normalize policy settings, including the growth of monetary aggregates.
In recent months, real money supply growth has drifted above its trend. Today’s measure will moderate this growth as well as domestic demand, thereby helping to sustain the current economic recovery, achieve the government’s medium-term inflation target, and reduce pressures on the Pak Rupee (PKR).
In addition, this measure is likely to have positive impact on deposit mobilization as the banks would be encouraged to generate more deposits to cope with additional liquidity requirements for their operations.
This would incentivize banks to offer better returns on deposits to attract these funds; thus serving the SBP objective of encouraging savings.
It may also be highlighted that waiver of CRR on Time liabilities with tenor more than a year will encourage banks to raise more long-term deposits, which will facilitate asset-liability matching and enable banks to extend long term loans for construction and housing financing.
KARACHI: Pakistan’s foreign exchange reserves have increased by $100 million to $24.026 billion by the week ended November 05, 2021, as compared with $23.926 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.
The official foreign exchange reserves of the central bank increased by $126 million to $17.326 billion by the week ended November 05, 2021when compared with $17.2 billion a week ago.
Meanwhile, the foreign exchange reserves held by the commercial banks fell by $26 million to $6.7 billion by week ended November 05, 2021 as compared with $6.726 billion a week ago
In separate meetings with the two Governors, various topics of mutual interest related to Islamic Banking, digitalization, open banking, and financial inclusion were discussed.
The Governors shared the vision that digital transformation could play a pivotal role in the expansion of Islamic Finance and help in improving financial inclusion. In the meeting with the Saudi Central Bank Governor, Dr. Baqir thanked the Saudi authorities for the financial support they had recently announced for Pakistan in the form of a deposit at the SBP and oil financing.
Dr. Baqir briefed the Governors of the Saudi Central Bank and Bank Indonesia about the recent initiatives of SBP in the areas of Islamic banking, digitalization, financial inclusion and low-cost housing finance.
While talking about digitalization of the financial sector he said that digitalization is a means to achieve the broader objective of making the financial sector more productive, efficient, and inclusive.
Governor SBP especially highlighted that digitization offers the highest potential to accelerate the pace of financial inclusion. Technology driven solutions are the key to open doors of the financial sector for the unserved and underserved segments of the society, particularly the women.
The Governors also shared their experiences during Covid-19 pandemic. Governor SBP apprised them about the various measures taken by the Government of Pakistan to successfully contain the spread of Covid in Pakistan. He also shared the measures taken by SBP to inject liquidity in the economy and banking sector during Covid that helped save jobs as the country went into a locked down situation.
Karachi, November 11, 2021 – The State Bank of Pakistan (SBP) has unveiled the official exchange rates for customers, applicable as of November 11, 2021.
KARACHI: The State Bank of Pakistan (SBP) has stressed the need of digital transformation of global Islamic financial services for its growth.
Digital transformation of the global Islamic financial Services industry has become a necessity for its growth and it needs to focus on innovative ways of service delivery that aligns with expectations of today’s tech-savvy and convenience-driven customers, SBP governor Dr. Reza Baqir said.
He was speaking at the 15th Islamic Finance Services Board (IFSB) Summit 2021 hosted by the Saudi Central Bank in Jeddah, according to a SBP statement issued on Wednesday.
The theme of the summit was “Islamic Finance and Digital Transformation: Balancing Innovation and Resilience.”
Dr. Reza Baqir, who is the Deputy Chairman of the Council of IFSB, was chairing a session on ‘Digital Transformation of Islamic Financial Services: Opportunities, Challenges and Policy Implications’. Other attendees at the summit included the central bank Governors of Saudi Arabia, UAE, Bahrain, Indonesia, Oman, and Libya.
With fast digitalization happening in the financial landscape, Governor SBP emphasized that the Islamic finance industry also needs to move to digitize their financial services and transform their processes to improve efficiency, reduce intermediation cost and increase outreach to a wider segments of society.
He pointed out that digitalization of Islamic financial services offers tremendous opportunities in achieving a more inclusive financial system for Islamic countries, where a significantly large number of adult population is unbanked than rest of the world.
SBP governor advised that development of Shariah and prudential standards related to fintechs and digital banking, by the international standards setting bodies such as AAOIFI and IFSB, would prove pivotal for the fast-paced development of global Islamic financial industry and recommended to set up a technical working group to specifically work on these standards.
He touched upon the key initiatives taken by State Bank of Pakistan during the last few years on the digital front, especially in the wake of COVID-19 pandemic.
He especially mentioned SBP’s initiatives pertaining to National Payment Systems Strategy, digital on boarding framework to bring banking services to the fingertips of the customers, digital on-boarding of merchants to facilitate the growth of digital payments and Roshan Digital Accounts for providing innovative banking solutions to millions of Non Resident Pakistanis (NRPs).
Other panelists of the session discussed how the digital transformations could benefit and bring significant opportunities for the Islamic finance industry allowing greater accessibility, convenience, speedy payment transactions and operational efficiency.
The panelists also shed light on new regulatory and supervisory challenges for the financial sector regulators posed by technological advancements. Further, they discussed policy implications of digitalization that focuses on maintaining a balance among financial innovation, integrity and stability.
The 15th IFSB Summit 2021 focused on ways to foster innovation, technological adoption, accessibility and sustainability in the Islamic financial system to aid its future growth and development. It also highlighted policy implications arising from rapid digital transformation and the work to be done, going forward, to strengthen its resilience and stability.
The Summit convened together high-level participants from regulatory and supervisory authorities, government officials, commercial institutions offering Islamic financial services, international organizations, multilateral development banks, academics and think tanks.
