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Tag: State Bank of Pakistan

  • No paper-based foreign exchange operation after June: SBP

    No paper-based foreign exchange operation after June: SBP

    KARACHI: All the banks will discontinue paper-based foreign exchange operation after June 2021, Managing Director of State Bank of Pakistan’s Banking Services Corporation Muhammad Ashraf Khan said on Monday.

    He said that digitalization of foreign exchange, which started in March 2020, has been expanded from 8 to 13 banks and majority of the banks will be processing 88 percent of foreign exchange digitally by the end of February 2021 and 98 percent by April whereas the banks will completely discontinue paper-based submissions after June 2021.

    MD SBP-BSC, while speaking at a meeting during his visit to the Karachi Chamber of Commerce & Industry (KCCI) on Monday, added that the initiative to digitalize foreign exchange operation was taken to create ease for the business community by completely eradicating the paperwork and expediting the overall process which has successfully been implemented by many banks.

    Head of Foreign Exchange Operations Department SBP Shakeel Muhammad Paracha, Director Exchange Policy Department SBP Arshad Mehmood Bhatti, Vice President KCCI Shamsul Islam Khan, Chairman of KCCI’s Banking & Insurance Subcommittee Qazi Zahid Hussain, Advisor Banking & Insurance Subcommittee Ateeq ur Rehman and others attended the meeting.

    MD SBP-BSC further stated that everything has been transferred from manual to digital processing and the customers have the freedom to get online anytime either from their home or office to apply for delivery of remittances without any paperwork while the customers will receive updates and objections (If any) about his transaction on his/ her registered email address.

    While assuring full support and cooperation, he stressed that the business and industrial community must come forward to adopt the digital mode for foreign exchange in which the customers can get registered themselves and track progress of case while relevant bank staff is also intimated about the progress and history of all the transactions is also maintained in a paperless environment.

    Vice President KCCI Shamsul Islam Khan, in his remarks, pointed that the State Bank, in any economy, plays the role of a heart in the economic development of the country by ensuring smooth circulation of funds and it was heartening to see that the State Bank has also been responsibly playing its role in an efficient manner which can be gauged from improved economic indicators particularly exports and remittances which have witnessed substantial growth.

    “However, the growth in remittances being witnessed nowadays may not last long hence, the State Bank needs to come up with some kind of the effective policy or incentive package which encourages Non-Resident Pakistanis (NRPs) to invest in numerous sectors of the economy.

    Encouraging such investments by NRPs would prove would not only help in dealing with economic crises but would also promote industrialization and create abundant employment opportunities on long term”, he added.

    He also stressed the need to take concrete measures for effectively dealing with the menace of smuggling which terribly hinders the legal trade and causes losses to the national exchequer.

    In this regard, he particularly suggested to establish Common Industrial Zone or Common Industrial Park near Pak-Iran border where all Custom Duties/ taxes should be kept at minimum level while this zone should be fully equipped with required infrastructure and the gas and electricity supplies should be provided by Iran which would surely bring down the cost of doing business due to cheaper electricity and gas tariffs that would attract a large number of industrialists to set up their units and warehouses in this particular zone.

  • Foreign direct investment plunges by 27 percent in seven months

    Foreign direct investment plunges by 27 percent in seven months

    KARACHI: The foreign direct investment FDI) has declined by $432 million or 27 percent during first seven months of the current fiscal year as compared with same months of the last fiscal year, State Bank of Pakistan (SBP) said on Monday.

    The net inflows of FDI fell to $1.145 billion during July – January 2020/2021 as compared with $1.577 billion in the corresponding months of the last fiscal year.

    The inflows of FDI were at $1.792 billion during the period under review as compared with $2.04 billion in the corresponding period of the last fiscal year. Similarly, the outflows increased by 39.5 percent to $647 million during July – January 2020/2021 as compared with $464 million in the same period of the last fiscal year.

    The portfolio investment in the capital market witnessed massive outflow during the period under review. The outflows from the capital market recorded $237 million during first seven months of the current fiscal year as compared with inflow of $21.5 million in the corresponding months of the last fiscal year.

    The overall investment, including foreign public investment, fell by 78 percent to $755 million during first seven months of the current fiscal year as compared with $3.438 billion in the corresponding period of the last fiscal year.

  • SBP governor to moderate dialogue on ‘banking on equity’ hosted by World Bank

    SBP governor to moderate dialogue on ‘banking on equity’ hosted by World Bank

    KARACHI: The World bank is hosting a webinar on ‘Consultative Dialogue on the State Bank of Pakistan’s Gender Financial Inclusion Policy – Banking on Equality’ on Tuesday, February 23, 2021, a statement said on Sunday.

    During the webinar, Governor SBP, Dr. Reza Baqir will moderate a high profile international panel discussion.

    The State Bank of Pakistan (SBP) has developed a draft policy titled ‘Banking on Equity’, which aims to introduce a gender lens within the financial sector through targeted measures to bring a shift to women friendly business practices and to significantly increase women’s financial inclusion in Pakistan, a statement said on Sunday.

    This policy is currently in a public consultation phase and is expected to be launched shortly.  SBP has held several Focus Group Discussions led by Governor SBP, Dr. Reza Baqir and Deputy Governor Sima Kamil with key stakeholders including government, financial institutions, regulatory bodies, academia, business federations, gender policy experts, civil society and women entrepreneurs. 

    This Webinar will draw on global experiences of gender responsive policies to inform how these may work effectively in the context of a developing country like Pakistan.

    During the webinar, Governor SBP, Dr. Reza Baqir will moderate a high profile international panel discussion. Joining him will be Ms. Caren Grown (Global Director, Gender, World Bank), Ms. Mary Ellen Iskenderian  (President & CEO, Women’s World Banking) and Ms. ParwatiSurjaudaja (President Director, Bank OCBC NISP Indonesia).

    The panelists are renowned global experts with rich experience in women’s financial inclusion and the benefit of their insights will help conclude the consultative phase of this policy.   

    The program will include views from Hartwig Schafer (Vice President for the South Asia Region, World Bank), Alfonso Garcia Mora (Vice President for Asia and Pacific, IFC) while Deputy Governor SBP Ms. Sima Kamil will present the key pillars of the policy.

  • SBP issues regulations for payment card security

    SBP issues regulations for payment card security

    KARACHI: State Bank of Pakistan (SBP) on Friday issued regulations for payment card security to curtail the risk of card-skimmig.

    Referring to PSD Circular No. 05 of 2016, the SBP said that in light of the progress made by industry on implementation of central bank’s instructions issued vide the afore-mentioned circular, it has now been decided that:

    i. In order to curtail the risk of card-skimming, existing magnetic stripe cards and fallback to magnetic stripe on EMV cards shall be blocked by Card Service Providers (CSPs) at host end. For customers travelling abroad, CSPs shall have the functionality to turn on fallback upon specific customer request. Further, CSPs shall ensure that their cardholders activate their new EMV Chip and PIN cards well before the deadline of June 30, 2021 to avoid any inconvenience.

    ii. CSPs after implementing EMVCo’s 3DSecure protocol may enable e-commerce transactions by default on their card portfolios for both local and cross-border e-commerce transactions. Accordingly, for all 3DSecure compliant CSPs, requirement of customer consent, as per clause 4.2.3. (b) of PSD Circular No. 5 of 2016 shall be considered as complied with. However, CSPs shall ensure that they fully inform their customers about the risks of using their cards for cross border e-commerce transactions.

    iii. CSP’s shall provide their customers with the option to activate, enable and disable their cards using mobile banking applications and internet banking portals. Furthermore, options to enable cards for usage on various channels like ATMs, POS and e-commerce shall also be available through mobile and internet banking channels. However, the use of at least Two Factor Authentication (2FA) shall be mandatory.

    iv. In order to enhance customer experience and reduce checkout time on payment counters/terminals, CSPs may relax the requirement of Multi Factor Authentication (MFA) as required vide Section 4.2. (b) of PSD Circular No. 05 of 2016 for card present transactions (including contactless payments either through a card or through mobile devices) up to Rs. 3,000 per transaction. However, CSPs shall ensure that they fully inform their customers and adequately protect them from undue liability arising out of any potential misuse of this facility.

    v. For refund payments pertaining to both card present and card not present transactions, CSPs shall immediately credit their respective customer account upon the receipt of funds.

    vi. To facilitate their customers, CSPs shall provide them the facility of lodging their complaints and disputes using mobile apps and internet banking portals without the need for physically visiting their premises. For expedited investigation and resolution of complaints/disputes, CSPs shall arrange for obtaining necessary data/information from their customers digitally or through their call centers.

    The card service providers shall bring the above measures and the changes being introduced to the knowledge of their customers by running awareness campaigns on print, digital and social media. They shall also ensure that customers are fully facilitated while using their payment cards.

    CSPs are advised to meticulously comply with the instructions contained herein by June 30, 2021. Failure to do so shall attract penal action under relevant laws and regulations.

  • Procedure for investment through Pound Sterling, Euro in NPC

    Procedure for investment through Pound Sterling, Euro in NPC

    KARACHI: State Bank of Pakistan (SBP) on Friday issued procedure for making investments in Naya Pakistan Certificate (NPC) through foreign currencies i.e. Pound Sterling (GBP) and Euro.

    The SBP informed all agent banks that Government of Pakistan, Finance Division (External Finance Wing), vide Gazette notification S.R.O.211(I)/2021, dated February 18, 2021 had notified that the NPCs shall also be issued in Pound Sterling (GBP) and Euro in following maturities, carrying gross rate of return (before deduction of tax) as under:-

    The minimum investment in both the currency shall be 5,000.

    The rate of return in case of GBP is 5.25 percent, 5.5 percent, 5.75 percent, 6.25 percent and 6.5 percent for tenors 03-month, 06-month, 13-month, 03-year and 05-year, respectively.

    The rate of return in case of Euro is 4.75 percent, 5 percent, 5.25 percent, 5.5 percent and 5.75 percent for tenors 03-month, 06-month, 13-month, 03-year and 05-year, respectively.

     The 3-Month, 6-Month and 12-Month tenor certificates shall be single-coupon securities on which principal and profit shall be paid on maturity or on premature encashment.

    Whereas, 3-Year and 5-year certificates shall be coupon securities, on which periodic profit payment shall be paid on half-yearly basis.

    The procedure for investment in Certificates, periodic coupon payment, pre-mature encashment and redemption at maturity as notified vide above referred Circular, shall also apply to the NPCs denominated in GBP and Euro. However, the agent banks shall remit the face value of the Certificates to the following nostro accounts of SBP maintained with United National Bank London (GBP) and NBP Frankfurt (Euro):-

  • EMV chip, PIN compliant cards made mandatory for ATM, POS networks

    EMV chip, PIN compliant cards made mandatory for ATM, POS networks

    KARACHI: The State Bank of Pakistan (SBP) on Friday made mandatory for ATM and POS networks to only accept Europay MasterCard Visa (EMV) Chip and PIN compliant payment cards for payments and online e-commerce services.

    To eliminate the risk of skimming of payment cards by fraudsters, SBP has directed that ATM and POS networks in Pakistan shall only accept EMV Chip and PIN compliant payment cards in the country.

    The SBP said that in order to promote digital payments, SBP has been taking steps to make them more secure, introducing new features and promoting their use.

    In consultation with the industry and other stakeholders, SBP has taken more steps to make digital transactions and card payments more secure and easier.

    Now the consumers will only have Europay MasterCard Visa (EMV) Chip and PIN compliant payment cards, which will be active right from the day issued to themfor payments and online e-commerce services.

    They will be able to make payments up to Rs. 3,000 by just tapping the card on POS machines and no PIN will be required.

    Consumers will also be able to make loan repayments through cards. They will be able to lodge complaints through digital channels without the need to visit a bank branch. State Bank has directed the banks to implement all these measures by June 30, 2021.

    The measure, aimed at further strengthening the security of digital payments and curtailing the risk of frauds, is a culmination of SBP’s efforts that started in 2016 outlining a detailed roadmap for adoption of EMV Chip and PIN standard for payment cards in Pakistan. Banks have also been directed to step-up their efforts to facilitate customers in case they face any issue while using their payment cards.

    SBP has allowed those banks who have already implemented 3-D Secure (an international standard that secures online e-commerce transactions) can now activate their customers’ payment cards for online e-commerce transactions without the need of specific requests for activation. Earlier in 2019, SBP had directed banks to implement 3-D Secure protocol to prevent frauds in online transaction and as a result, 15 banks had already adopted this international standard for securing online transactions. The new measure is expected to promote online e-commerce ecosystem and shape consumer behavior towards online e-commerce digital payments in the country.

    To make it easier and quicker to make small payments, SBP has allowed banks to relax the requirement of entering PINs for transactions up to PKR. 3,000. Banks depending on their risk management policies may decide on the amount, which may be exempted from PIN requirement on card transactions including contactless payments. However, SBP has directed banks to ensure that customers are adequately protected from undue liability arising out of misuse of this facility. With this measure, SBP hopes to see wider adoption of card-based payment acceptance by merchants who may be reluctant to do so because of longer processing times.

    Taking notice of consumer complaints regarding delays in receiving refunds after resolution of disputes, SBP has directed all banks to immediately credit customer accounts once they receive fund from either merchants or acquiring banks. The regulator has also directed banks to facilitate their customers in registering their complaints and disputes using mobile apps and internet banking portals without the need for physically visiting branches. 

    Enhancing the drive towards digitization of payments, SBP has also directed all banks/microfinance banks to take measures to facilitate their borrowers in making repayments of loans such as consumer loans, auto loans etc. digitally using internet and mobile banking applications of any bank.

  • SBP takes measures for prevention of digital bank fraud

    SBP takes measures for prevention of digital bank fraud

    KARACHI: The State Bank of Pakistan (SBP) on Friday taken measures for prevention of digital bank fraud and issued directions to stakeholders in this regards.

    The central bank said that in collaboration with other stakeholders it had initiated various measures to curtail digital banking frauds, conducted by employing social engineering tactics including fake calls.

    In order to successfully design and deploy additional measures, it is vital to have sufficient information about these frauds.

    In this respect, two standardized formats have been developed to record information relating to attempted and committed fake call frauds.

    At the time of receiving the calls from customers for reporting of these frauds, the agents at call centers of all Banks/MFBs will record the information, where available, as per the given formats.

    Banks/MFBs will report data recorded as per the prescribed formats to the Offsite Supervision & Enforcement Department (OSED) of SBP on monthly basis.

    The data will be reported to the SBP in soft copy in Microsoft Excel within 10 days from the close of every month.

    The SBP directed banks/MFBs to ensure that the call center agents are sufficiently trained to handle calls received for reporting digital banking frauds.

    They must be capable of identifying attempted digital banking frauds related calls when a naive customer unaware of fraudulent attempt reports such instances.

    Banks/MFBs will report the relevant information to PTA for blocking SIM/Device of the fraudsters used for committed/attempted digital banking frauds as soon as identified.

    As a control mechanism to avoid any further financial loss, the call agents upon receiving calls for blocking digital channels/cards in case of fraud will immediately block all channels temporarily, under intimation to the customer, before seeking detailed verification from the customer.

    The verification required from the customer as per procedure will subsequently be acquired on the same call.

    For blocking of digital channels, the requirement to call from registered numbers would not be necessary since the customer may not have access to his/her registered telephone number; however, the banks may conduct enhanced verification in cases where the request for blocking of channels was received from an unregistered number.

    In order to unblock the account/continue services, the Banks/MFBs will guide the customers as per their relevant policies.

    Banks/MFBs are advised to implement the above measures within 30 days from the issuance of this circular.

  • SBP issues instructions for reporting borrowers’ information

    SBP issues instructions for reporting borrowers’ information

    KARACHI: The State Bank of Pakistan on Thursday issued instructions for banks to ensure quality reporting regarding borrowers’ information.

    The SBP said the Credit Information Bureau (eCIB) of the central bank collects borrowers’ credit information and makes it available to financial institutions (FIs) for making informed credit decisions.

    The information in eCIB is also used by SBP for supervisory purposes.

    Accordingly, quality data reporting in eCIB remains a top priority for SBP.

    In this regard, the SBP, carried out an in-depth assessment of the mechanisms put in place for eCIB data feeding, compilation, validation and reporting by the member FIs.

    In light of the findings of this exercise, instructions have been developed to ensure quality data reporting in eCIB.
    All the member FIs are advised to ensure strict compliance with the enclosed “Instructions for Quality Data Reporting in eCIB” in letter and spirit to avoid any untoward business and legal implication of the incorrect data reporting in eCIB.

    Failure to comply with these instructions will attract strict penal actions against the concerned FIs under the relevant legal and regulatory provisions.

    The SBP said that despite the issuance of repeated instructions from time to time regarding the quality data reporting, still some inconsistencies in the eCIB reported data were witnessed.

    Such inaccuracies in data can result in adverse selection by the FIs such as the inadvertent refusal of credit application of a good borrower or extension of credit to a bad borrower. Besides, it may also expose the member FIs to legal and regulatory implications.

    Therefore, to ensure high-quality credit reporting of credit data, all the member FIs are advised to ensure that the financial and non-financial data should be:

    i. Accurate (i.e. correct, up-to-date, having strong validation process for identification of data subjects and other information as per prescribed data formats).

    ii. Sufficient, relevant, and collected on a systematic basis from all reliable, appropriate, and available sources.

    iii. Timely (updated on a continuous basis and reported to eCIB).

    iv. Retained safely for at least five years or otherwise specified in the relevant law/regulations issued by SBP from time to time.

  • Foreign exchange reserves ease to $20.058 billion

    Foreign exchange reserves ease to $20.058 billion

    KARACHI: The country’s foreign exchange reserves eased by $15 million to $20.058 billion by week ended February 12, 2021, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.073 billion by week ended February 04, 2021.

    The official foreign exchange reserves of the central bank fell by $60 million to $12.889 billion by week ended February 12, 2021 as compared with $12.949 billion a week ago.

    However, foreign exchange reserves held by the commercial banks increased by $45 million to $7.169 billion by week ended February 12, 2021 as compared with $7.124 billion a week ago.