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Tag: State Bank of Pakistan

  • Exchange companies allowed export foreign currencies on consignment basis

    Exchange companies allowed export foreign currencies on consignment basis

    KARACHI: The State Bank of Pakistan (SBP) on Monday allowed exchanged companies to export foreign currencies other than US Dollars on consignment basis.

    The SBP said that under Exchange Companies Manual the exchange companies are allowed to export permissible foreign currencies other than US Dollars.

    “In order to further streamline the business of Exchange Companies keeping in view the emerging AML/CFT standards, it has been decided that Exchange Companies may export foreign currencies other than US Dollars on consignment basis only through cargo/security companies registered in Pakistan,” the SBP said.

    Further, the earlier mechanism for individual based export/import of foreign currencies by Exchange Companies stands discontinued, it added..

    Accordingly, Chapter-5 of the Exchange Companies Manual along with its Annexure-5 has been revised which is enclosed herewith for meticulous compliance.

    Further Para 9(iv), Chapter-3 of Exchange Companies Manual also stands revised as under:

    “Exchange Companies can export foreign currencies other than United States Dollar (USD) and bring in equivalent USD in their foreign currency accounts maintained with banks in Pakistan. Prior authorization from State Bank is mandatory before starting the foreign currency exports business. Detailed procedure for undertaking foreign currency export business is given in Chapter 5”.

  • SBP allows banks to issue guarantees on behalf of Pakistani firms

    SBP allows banks to issue guarantees on behalf of Pakistani firms

    KARACHI: The State Bank of Pakistan (SBP) on Monday allowed banks to issue guarantees on behalf of Pakistani firms and companies against the back to back / counter – guarantees of banks/development financial institutions (DFIs) rated at least A or equivalent by a credit rating agency on approved panel of the SBP.

    The SBP amended prudential regulations for corporate and commercial banking and decided that banks/DFIs can issue guarantees on behalf of Pakistani firms and companies functioning in Pakistan against the back to back/counter-guarantees of banks/DFIs rated at least ‘A’ or equivalent by a credit rating agency on the approved panel of State Bank of Pakistan.

    Besides, the counter-guarantee of bank/DFI situated in a foreign country is also acceptable if it has the rating of at least ‘A’ or equivalent on global or National Rating scale by Standard & Poor, Moody’s, Fitch, Japan Credit Rating Agency (JCRA) or a local credit rating agency of the respective country provided the guarantee issuing bank in Pakistan is comfortable with and accepts the counter -guarantee of such foreign bank.

    Moreover, subject to the following conditions and limits, banks/DFIs can issue guarantee against the back-to-back/counter guarantee of an unrated, or rated below ‘A’, bank/DFI that is situated in a foreign country:

    (a). The aggregate amount of all such guarantees at any point in time should not exceed 10% of the bank’s/DFI’s own equity as disclosed in the latest audited financial statements;

    (b). The banks/DFIs will have a board of directors (BoD) approved policy having internal limits for acceptance of such counter guarantees based on, inter alia, their own risk appetite and relevant risk factors. The policy may also set more conservative limits than as prescribed in para (a) above. There shall also be instituted a mechanism to monitor such exposures and limits.“

  • Total foreign investment surges by over 98pc in 10 months

    Total foreign investment surges by over 98pc in 10 months

    KARACHI: The inflow of total foreign investment into Pakistan has surged by over 98 percent during first 10 months (July – April) 2020/2021 of the current fiscal year owing to massive investments in public debt securities.

    According to data released by State Bank of Pakistan (SBP) on Friday, the total foreign investment into the country increased to $3.736 billion during first ten months of the current fiscal year as compared with $1.884 billion in the corresponding months of the last fiscal year.

    The foreign public investment in debt securities has increased to $2.463 billion during the period under review as compared with the outflow of $234 million in the same period of the last fiscal year.

    The foreign private investment fell by around 40 percent to $1.273 billion during first ten months of the current fiscal year as compared with $2.118 billion in the corresponding months of the last fiscal year.

    The major component of foreign private investment i.e. foreign direct investment (FDI) registered a decline of 32.5 percent to $1.553 billion during July – April 2020/2021 as compared with $2.301 billion in the same period of the last fiscal year.

    The other component of the foreign private investment i.e. portfolio investment in the stock market witnessed a sharp outflow of $280 million during the period under review as compared with the outflow of $182.7 million in the same period of the last fiscal year.

  • SBP cuts SLR requirement for exchange companies to 15pc

    SBP cuts SLR requirement for exchange companies to 15pc

    KARACHI: The State Bank of Pakistan (SBP) on Thursday reduced the requirement of Statutory Liquidity Reserve (SLR) for exchange companies from 25 percent to 15 percent in order to channelize home remittances and foreign exchange.

    In a statement the central bank said it had revised SLR requirement of exchange companies from 25 percent to 15 percent of their capital. The enhanced liquidity with exchange companies will enable them to further channelize home remittances and foreign exchange. 

    During the year ended June 2020 Exchange Companies, through their tie up arrangements abroad, have channelized home remittances of $1.44 billion, while this figure stands at $1.67 billion for ten months of current year i.e. 2020/2021.

    This regulatory intervention of State Bank would provide increased liquidity to Exchange Companies to enable them to play their role in increasing the remittances flow and the public will be further facilitated in timely and conveniently receiving home remittances from more than 1,200 outlets of Exchange Companies across Pakistan.   

    At present, out of twenty-seven exchange companies of ‘A’ category, 18 exchange companies are providing home remittances services.

  • SBP cancels exchange company license on regulatory violation

    SBP cancels exchange company license on regulatory violation

    KARACHI: The State Bank of Pakistan (SBP) on Thursday cancelled the license of an exchange company for violation the regulatory provisions.

    The SBP said it cancelled the license of M/s Karwan Exchange Company ‘B’ (Pvt.) Limited on account of violations of SBP’s regulations.

    The said exchange company, including its head office and branches have been debarred from undertaking any kind of foreign exchange related business activity.

  • SBP issues annual schedule for monetary policy

    SBP issues annual schedule for monetary policy

    KARACHI: The State Bank of Pakistan (SBP) for the first time issued annual schedule for announcement of monetary policy, a statement said on Thursday.

    The SBP said that taking another step towards making the process of monetary policy formulation more predictable and transparent, the State Bank of Pakistan (SBP) has decided to begin announcing a half-yearly schedule of Monetary Policy Committee (MPC) meetings on a rolling basis. In this regard, the dates for the next four meetings are envisaged as follows:

    May MPC meeting: Friday, 28th May 2021

    July MPC meeting: Tuesday, 27th July 2021

    September MPC meeting: Monday, 20th September 2021

    November MPC meeting: Friday, 26th November 2021

    It is pertinent to mention that a minimum of 6 MPC meetings are scheduled every year. In addition, the MPC can convene emergency meetings during the intervening period, if required.

    In taking this step, SBP is following international best practices. To manage expectations of economic agents, many central banks across the globe release the schedule of Monetary Policy Committee meetings in advance. This practice is consistent with the objective of reducing uncertainty around monetary policy decision making.

    Clear communication helps to make central banks more transparent, and thereby contributes to enhancing their accountability. Central bank communication and transparency are also key for effective transmission of monetary policy decisions. In this context, SBP has over the years been seeking to modernize and increase transparency in the monetary policy making process, in line with international best practices. Some of these initiatives are laid out below:

    In 2005, SBP began releasing Monetary Policy Statements.

    In 2009, it was decided to hold at least 6 meetings on monetary policy, envisaged to take place in the calendar months of January, March, May, July, September and November. It was also decided to hold a press conference to announce the monetary policy decision in the months of January and July, to supplement the Monetary Policy Statement.

    In 2015, after the introduction of an independent Monetary Policy Committee through an amendment in the SBP Act, two major changes were introduced to increase transparency. First, SBP started publishing minutes of the MPC meetings on its website. Second, the voting pattern of the MPC members was also made public.

    In 2020, to make monetary policy communication more effective, SBP enhanced interactions with analysts, the media, various business forums, academics, and investors through regular briefing sessions with its senior management.

    In January 2021, in light of the extreme uncertainty caused by the Covid pandemic, the MPC decided to provide forward guidance on monetary policy for the first time to facilitate policy predictability and decision-making by economic agents.

    Looking forward, SBP remains committed to continue modernizing its communication in line with international best practices and evolving domestic circumstances.

  • Remittances hit all-time monthly high of $2.8bn in April

    Remittances hit all-time monthly high of $2.8bn in April

    KARACHI: State Bank of Pakistan (SBP) on Tuesday said that the inflow of workers’ remittances rose to an all-time monthly high of $2.8 billion in April 2021, which is 56 percent higher than during the same month last year.

    On a cumulative basis, remittances have also surpassed previous records. At $ 24.2 billion in July-April FY21, remittances grew by 29 percent over the same period last year and have already crossed the full FY20 level by more than $1 billion.

    Remittance inflows during July-April FY21 were mainly sourced from Saudi Arabia ($6.4 billion), United Arab Emirates ($5.1 billion), United Kingdom ($3.3 billion) and the United States ($2.2 billion).

    Proactive policy measures by the Government and SBP to encourage more inflows through formal channels, curtailed cross border travel in the face of COVID-19, altruistic transfers to Pakistan amid the pandemic, orderly foreign exchange market conditions and, more recently, Eid-related inflows have contributed to record levels of remittances this year.

  • Foreign exchange reserves increase to $22.91 billion

    Foreign exchange reserves increase to $22.91 billion

    KARACHI: The foreign exchange reserves of the country increased by $167 million to $22.91 billion by week ended May 07, 2021, State Bank of Pakistan (SBP) said on Monday.

    The foreign exchange reserves of the country were at $22.743 billion by week ended April 30, 2021.

    The foreign exchange reserves held by the SBP increased by $176 million to $15.774 billion by week ended May 07, 2021 as compared with $15.598 billion by week ended April 30, 2021. The SBP attributed the weekly increase in the foreign exchange reserves to the government’s official inflows.

    The foreign exchange reserves held by commercial banks eased by $9 million to $7.136 billion by week ended May 07, 2021 as compared with $7.145 million on the week ended by April 30, 2021.

  • SBP revises banking hours for public dealing

    SBP revises banking hours for public dealing

    KARACHI: The State Bank of Pakistan (SBP) has revised banking hours for public dealings effective from Monday May 17, 2021.

    The SBP said that as per new schedule the banks and microfinance banks to observed following banking hours for public dealing:

    Monday to Thursday: 9:00 AM to 1:30 PM

    Friday: 9:00 AM to 1:00 PM

    The SBP said that banks may prescribe banking hours as per the requirement with the minimum benchmark of SBP (BSC) set for the purpose.

    Previously, through a notification issued on April 28, 2021, the SBP revised the banking hours in line with the decision of National Command and Operation Center (NCOC) to contain the spread of COVID-19.

    The previous banking hours were:

    Monday to Thursday: 9:00 AM to 1:00 PM (without break)

    Friday: 9:00 AM to 12:30 PM (without break).

    The SBP further said that and all other banks will revert to normal office hours effective from May 17, 2021.

    Monday to Thurs: 9:00 a.m. to 5:30 p.m.

    Friday: 9:00 a.m. to 6:00 p.m.

  • Banks to remain open on 10th, 11th May

    Banks to remain open on 10th, 11th May

    KARACHI: The banks shall remain open on May 10 – 11, 2021 to facilitate general public and trade during first two Eid Holidays announced by the government from May 10, 2021 to May 15, 2021.

    The State Bank of Pakistan (SBP) has already issued circular in this regard.

    The central bank on May 06, 2021 issued the notification stating that in order to ensure the availability of banking services to trade and industry in particular and public in general during the extended holidays before the forthcoming Eid-ul-Fitr, it has been decided that banks shall open 50 percent of their total authorized branches dealing in foreign exchange and trade activities on 10th May, 2021 (Monday).

    The SBP further said that the remaining 50 percent of such branches on 11th May, 2021 (Tuesday) from 9:00 a.m. to 2:00 p.m. (without break).