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  • Roshan Digital Accounts: SBP issues instructions for facilitating overseas Pakistanis

    Roshan Digital Accounts: SBP issues instructions for facilitating overseas Pakistanis

    KARACHI: State Bank of Pakistan (SBP) on Wednesday issued instructions to designated banks for compliance in facilitating overseas Pakistanis in opening their bank accounts.

    The SBP said that it had launched the ‘Roshan Digital Accounts (RDA) for Non-Resident Pakistanis’ (NRPs) to enable them to remotely open bank accounts in Pakistan through online digital portals of your bank without physically visiting branches.

    For this purpose, SBP has already issued a simplified account opening framework and other regulatory instructions.

    Using their RDAs, NRPs can now avail digital banking facilities, including access to online banking, domestic funds transfer, utility bills and tuition fee payment in Pakistan, as well as investments in government bills, stock exchange, and real estate sector with option of full repatriation.

    To make the scheme a success it is imperative that participating banks provide excellent user experience and convenience to prospective and existing customers while maintaining high service standards. In this regard, the following instructions are being issued for strict compliance:

    Development and Continuous Improvements of RDA Portals and Mobile Apps: Banks shall ensure compliance with the following minimum requirements for developing and maintaining their web portals:

    Banks shall continuously endeavor to provide an exceptional and seamless digital experience to their customers via their web portals, mobile apps and other digital channels.

    Bank shall ensure that official Logo of RDA as provided by SBP is clearly displayed on web-portals, mobile apps and other marketing collaterals.

    Banks shall ensure full security of their digital channels including portals/mobile apps and ensure that customer information/documents are fully protected from unauthorized access.

    Bank shall ensure that Data Security and Privacy Assurance Statements, explicitly mentioning that all the information/documents and data provided by customers is secure and will not be divulged,  are displayed appropriately to ensure customer comfort in this regard.

    Banks shall ensure that their web portals clearly provide an overview of the RDA scheme, and also display eligibility criteria and documentary requirements, as specified by SBP in the Framework for Remote/ Digital Onboarding of NRPs.

    Banks shall ensure that video tutorials on how to open RDA account are provided on the web portals for customer assistance.

    To provide 24/7 customer support, banks shall ensure that live chat option or other messaging services such as WhatsApp and Facebook Chat options are working during account opening. Moreover, for customer information/guidance, banks shall ensure that Frequently Asked Questions (FAQs) are prominently placed on their RDA page and are regularly updated.

    Banks shall ensure that customers are able to save their applications, either themselves or automatically, at any stage of the account opening process.

    Banks shall ensure that a feedback form is available for customers who visit their portals/download mobile apps for account opening. Banks shall also provide other mechanisms for soliciting customer feedback via call centers, email, social media etc.

    Banks shall offer both Islamic and conventional accounts, where applicable/allowed and in various eligible currencies (and not just USD) as per the relevant rules and regulations of SBP.

    Banks shall provide services like online banking, online fund transfers in Pakistan, payments of utility and other bill, mobile and wallet tops ups in Pakistan, investment in government securities such as Naya Pakistan Certificates (NPC), round the clock currency conversion services, and immediate repatriation of funds to their customers.

    Banks shall also arrange for issuing debit, credit and virtual cards to their customers and enabling their online usage.

    Banks may work with other stakeholder and provide options for other lifestyle banking products like investments in Pakistan Stock Exchange, real estate and other products/services commensurate with customer KYC.

    Bank may offer the service to dispatch the ATM/Debit card and cheque book at the registered address of the NRP/POC card holders outside Pakistan. For this purpose, the banks shall explicitly mention the applicable charges, and take consent of the customer on the charges before providing this services. The banks shall institute effective controls to manage the associated risks.

    Account Opening Process: Banks shall ensure compliance with the following minimum requirements for ensuring a seamless account opening and monitoring process:

    Banks shall ensure that accounts are opened and activated after seeking the information as specified in the Framework for Remote/ Digital Onboarding of NRPs issued by BPRD and updated from time to time. If banks require additional information as per their internal policies, they may do so after the accounts are opened and activated.

    An account opening application may be considered as “In-Process”, once the bank receives a customer’s primary contact details such as name, valid email address/phone number and country of residence etc. These details should be solicited at the beginning of the account opening process. Banks shall ensure adequate follow up with these prospective clients to help them complete their application.

    However, the bank may mark the application as “Closed – Customer not interested”, if the customer fails to complete their application and provide relevant documentation within a reasonable time-period, to be determined by the bank but which shall not be less than 30 days, or explicitly informs the bank of their intent to withdraw their application.

    Banks shall depute adequate number of resources such as Relationship Officers to ensure that customers are contacted in a timely manner to avoid backlog of customer applications and unnecessary delays in account opening. Further, during the course of account opening, banks shall put in place an appropriate mechanism to update the customer of their application status, such as In-Process, pending due to missing information/documents, pending due to incorrect information, successful or declined.

  • Rules notified for issuance of Naya Pakistan Certificates for overseas, resident Pakistanis

    Rules notified for issuance of Naya Pakistan Certificates for overseas, resident Pakistanis

    ISLAMABAD: The ministry of finance has notified rules for issuance of Naya Pakistan Certificates (NPC) at for overseas Pakistanis at an attractive rate of return against dollar denomination bills.

    According to the rules notified on Tuesday, every non-resident Pakistani having national identity card for overseas Pakistanis, foreigners having Pakistan origin card, members of overseas Pakistanis foundation, an employee or official of the federal government or a provincial government posted abroad who are eligible to open FCVA or NRVA as per the relevant regulations shall be eligible either individually or jointly to purchase the certificates.

    The certificates are also available for resident Pakistanis having assets abroad, duly declared in latest tax return filed with the Federal Board of Revenue, may also invest in the certificate through their FCVA in Pakistan subject to such controls, conditions and operational procedure as may be notified by the State Bank of Pakistan under these rules.

    The details obtained from SBP website revealed that the investors shall only pay 10 percent withholding tax, which will be final tax liability. Further, investors will also not be required to file income tax return for their investment.

    Naya Pakistan Certificate which will be offered to both residents and overseas Pakistanis at annualized return up to 11 percent in rupee and up to 7 percent in dollar denomination bills.

    The SBP said that Naya Pakistan Certificates are sovereign instruments being issued by the government for overseas Pakistanis as well as resident Pakistanis who have declared assets abroad.

    The bills will be available at 3-, 6- and 12-month and 3- and 5-year tenors. The government will allow early enacashment.

    According to the SBP, the certificates are available at very attractive and risk-free returns. In dollar denomination bills the return shall be at 5.5 percent, 6 percent and 6.5 percent for 3-, 6- and 12-month tenors. While for 3- and 5-year bills will attract 6.75 percent and 7 percent.

    The rupee denomination bills shall be available at 9.5 percent, 10 percent and 10.5 percent for 3-, 6- and 12 months tenor. While, the certificates of 3- and 5-year tenors certificate shall attract 10.75 percent and 11 percent, respectively.

    Pakistani tax authorities will not ask the source of investment to be made in these certificates. However, 10 percent withholding tax shall be applicable and it will be final tax liability. Further, investors will not be asked to file income tax return.

    The SBP said that the certificates are fully repatriable and no approvals will be required for remitting funds abroad.

  • Foreign exchange reserves increase to $19.84 billion

    Foreign exchange reserves increase to $19.84 billion

    KARACHI: The liquid foreign exchange of the country has increased by $121 million to $19.843 billion by week ended August 28, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves were at $19.722 billion by week ended August 21.2020.

    The official foreign exchange reserves of the SBP increased by $72 million to $12.713 billion by week ended August 28, 2020 as compared with $12.641 billion a week ago.

    Similarly, the foreign exchange reserves held by commercial banks also increased by $49 million to $7.13 billion by week ended August 28, 2020 as compared with $7.081 billion a week ago.

  • SBP issues instructions to banks on sugar import

    SBP issues instructions to banks on sugar import

    KARACHI: State Bank of Pakistan (SBP) on Monday issued instructions to banks regarding import of sugar by private importers.

    The central bank said that the ministry of commerce had issued a public notice stating that the government had allowed import of 200,000 tons of white sugar by private importers as per the terms and conditions mentioned therein.

    The SBP said that to facilitate the import of sugar under the subject Public Notice, the banks may process the requests for import of white sugar as per following terms and conditions:

    Import may be allowed on behalf of those importers who have been issued permit(s) by the Ministry of Commerce under the above-mentioned Public Notice;

    Import may be allowed on CFR Free out basis, as an exception to the instructions given under Para 5 Chapter 13 of the FE Manual;

    Advance payment up to 100 percent of the value of letter of credit/contract/proforma invoice may be allowed, subject to compliance with other terms & conditions given under Para 30 of Chapter 13 of the FE Manual;

    The commercial banks have been asked to submit consolidated data of LCs issued and advance payments made, against issued permits, to Foreign Exchange Operations Department, SBP BSC, Head Office, Karachi on daily basis.

    The banks should also ensure compliance with all other terms & conditions of permit(s) issued by Ministry of Commerce.

  • Bank holidays announced for Ashura

    Bank holidays announced for Ashura

    KARACHI: State Bank of Pakistan (SBP) on Tuesday announced that the central bank will remain closed on August 29 and 30 on occasion of Ashura, Muharram ul Haram, 1442 AH.

    The SBP, in a statement, said that the central bank will remain closed on August 29-30, 2020 (Saturday and Sunday) on the occasion of Ashura, Muharram-ul-Haram, 1442 AH.

  • Banks fail to meet agri credit disbursement target

    Banks fail to meet agri credit disbursement target

    KARACHI: Banks have missed agriculture credit disbursement target for fiscal year 2019/2020 by Rs135 billion but the credit disbursement was 3.5 percent higher than the preceding fiscal year, State Bank of Pakistan (SBP) said on Monday.

    The central bank in a statement said that the banks disbursed Rs 1,215 billion to agriculture sector during 2019-2020. This is 3.5 percent higher than the amount disbursed in the previous fiscal year but less than the credit target of Rs 1,350 billion which was set by Agricultural Credit Advisory Committee (ACAC) in Peshawar in November 2019.

    Some factors which have constrained the growth of agriculture credit include the impact of COVID-19 pandemic, locust attack and continuing real side issues including water shortage, low production of cotton, sugarcane, low off take of fertilizers and volatility in prices of agri. produce etc.

    The outstanding portfolio of agriculture credit increased to Rs 581 billion at end June, 2020, registering growth of 3.3 percent compared with the last year’s position of Rs 562 billion.

    However, the number of agriculture borrowers declined from 4.01 million at end June 2019 to 3.74 million at end June 2020 due to the COVID-19 lockdown situation in the country.

    The analysis of disbursement reveals that during FY 2019-20, five major commercial banks collectively disbursed agriculture loans of Rs 708.3 billion or 100.5 percent of their annual target of Rs 705 billion, specialized banks disbursed Rs 71.1 billion or 62.9 percent of their annual target of Rs 113 billion and fourteen domestic private banks as a group achieved 88.7 percent by disbursing Rs 225.0 billion against their target of Rs 253.6 billion.

    Further, the five Islamic Banks as a group achieved 76.6 percent of their annual target of Rs 55.0 billion by disbursing Rs 42.1 billion which is 6.1  percent higher than the disbursement made during the corresponding period last year. Similarly, the Islamic windows of commercial banks disbursed Rs 43.5 billion or 79.2 percent against the target of Rs 55.0 billion in FY 2019-20 which is 33  percent higher from the disbursement of Rs 32.7 billion made during last year.

    The agriculture credit of microfinance sector remained relatively sluggish due to COVID-19 lockdown in the 2nd half of FY 2019-20. The Microfinance Banks (MFBs) as a group have achieved 75.7 percent by disbursing agriculture loans of Rs 139.3 billion to small farmers which is 9.5 percent lower than the disbursement of Rs 154 billion during same period last year.

    Likewise, the Microfinance Institutions/Rural Support Programs collectively achieved 73.4 percent of their targets by disbursing Rs 28.9 billion which is 15  percent lower than the disbursement of Rs 34 billion made during the last year to small and marginalized farmers.

    It is important to mention that SBP announced a comprehensive relief package in collaboration with stakeholders for relief of agriculture sector to deal with the adverse implications of the ongoing pandemic on the farming community and agriculture business in the downstream of value chains. These measures which included deferment of principal and restructuring/rescheduling of agriculture loans were initially allowed uptill June 30, 2020 have been extended upto 30 September 2020.

    SBP will continue to monitor the situation and it may introduce more measures to help the sector manage its finances during this temporary phase of disruption.

  • FPCCI praises SBP for timely action to avert coronavirus impact

    FPCCI praises SBP for timely action to avert coronavirus impact

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has praised State Bank of Pakistan (SBP) for timely action to minimize adverse impact of coronavirus on trade and industry, a statement said on Monday.

    “However, implementation of such measures is required to reach at the grass root level,” said Khurram Ijaz, Vice President, FPCCI, while chairing webinar on ‘Implications of Covid-19 on the Financial Market/Institutions of Pakistan.’

    He said that outbreak of Coronavirus has not only affected the trade and industry of Pakistan, but drastically declined the performance of the financial market and major economic indicators in the economy.

    During discussing, Arjumand Qazi, Group Head (SME)- Pak Brunei Investment said that SBP has indeed extended maximum support to the trade and industry in term of designing and announcing effective financing schemes since April 2020.

    However, commercial banks and other financial institutions are still reluctant to extend such facilities to rural businesses.

    Khurram Shehzad renowned financial expert appreciated SBP’s measure to decrease the interest rate from 13 percent to almost 7 percent in last 6 months.

    He said that it is high time that commercial banks, investment companies and other stakeholders of the financial market play their part in the economic and financial survival of the economy.

    Hasan Raza, Head of Project Management in Research Dept. Pakistan Stock Exchange (PSX) said that Pakistan Stock Exchange fell down to 27000 index point in February 2020 at the start of the lockdown, but with the efforts of PSX, the KSE index point has reached upto 40,000 index point in August 2020.

    He further shared information regarding newly launched mutual funds and new Sukuk bonds in 2020.

    While expressing his views, Zubair Haider Sheikh, Head of Cooperate & Investment Banking-Dubai Islamic Bank said that as the country is moving back to normal activities amid ease of lockdown in the economy, the commercial banks must come upfront to expand Temporary Economic Refinance Facility (TERF) as well as long term financing schemes to the masses.

    Ahsan Mahenti, Managing Director, Arif Habib Commodities while appreciating SBP’s initiatives to fight the financial losses bared by the business during lockdown however, there is still need of incentive driven policies to support the corporate sector as well.

    Participants of the webinar included Ali Kamal, Head of Research National Investment Trust (NIT), Imran Khali, Chairman Pak-Maldives Business Councils of FPCCI, Shabbir Mansha, Convener FPCCI Standing Committee on Custom Affairs, Amber Paracha Head of Credit Risk Management of Pak-Brunei Investment, members Trade Bodies and prominent members of FPCCI appreciated the initiative by FPCCI for conducting such informative seminars on various topics economic issues highlighting the problems and solutions which is highly commendable.

  • Pakistan records current account surplus of 1.9pc to GDP in July

    Pakistan records current account surplus of 1.9pc to GDP in July

    KARACHI: The balance of payment of the country registered current account surplus i.e. 1.9 percent of the GDP during the first month of the current fiscal year, according to statistics released by State Bank of Pakistan (SBP) on Monday.

    The BOP witnessed a current account deficit of 2.8 percent of the GDP in July 2019.

    The statistics revealed that the current account surplus stood at $424 million in July 2020 as compared with current account deficit of $613 million in the same month of the last year.

    The current account surplus may be attributed to record inflows of workers’ remittances in July 2020. In the month under review the workers’ remittances rose to $2.77 billion. This is the highest ever level of remittances in a single month in Pakistan, according to the SBP.

    The exports also exhibited 6.1 percent growth to $2 billion in July 2020 as compared with $1.88 billion in the same month of the last year. On the other hand the import bill of the country declined by 0.7 percent to $3.68 billion in July 2020 as compared with $3.71 in the same month of the last year.

    The trade deficit narrowed by 7.7 percent to $1.68 billion in July 2020 as compared with the deficit of $1.83 billion in the same month of the last year.

  • SBP allows extension in foreign currency loan settlement

    SBP allows extension in foreign currency loan settlement

    KARACHI: State Bank of Pakistan (SBP) has allowed extension in settlement of foreign currency loans to facilitate exporters and importers in wake of coronavirus pandemic.

    In a statement issued on Thursday, the SBP said that continuing with its commitment to support the industry amid COVID-19 pandemic, the central bank further facilitated the exporters and importers by allowing extension up to 180 days in settlement of their export and import loans under FE-25 Scheme.

    Banks can now allow extension up to 180 days to exporters in settlement of their FE-25 loans in case they are facing delay in realization of export proceeds due to COVID-19.

    Moreover, banks can also allow settlement of FE-25 loans to exporters through substitute contract during the extended period of 180 days where the original export contract has been cancelled due to COVID-19.

    Likewise, SBP has also allowed the bank to extend the maturity of FE-25 import loans by 180 days.

    This facilitation has been provided to exporter and importers for their foreign currency loans maturing up to September 30, 2020.

    State Bank reiterates its unflinching resolve to continue working with all stakeholders to provide all needed facilitation in these uncertain times in the larger interest of people of Pakistan.

  • Foreign exchange reserves increase to $19.655 billion

    Foreign exchange reserves increase to $19.655 billion

    KARACHI: The liquid foreign exchange reserves of the country increased by $137 million to $19.655 billion by week ended August 13, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $19.518 billion by week ended August 07, 2020.

    The foreign exchange reserves held by the central bank also increased by $139 million to $12.608 billion by week ended August 13, 2020 as compared with $12.469 billion a week ago.

    The SBP attributed the increase in reserves to proceeds of $249.4 million from Asian Infrastructure Investment Bank (AIIB). Meanwhile, during the week, SBP also made government external debt repayments of $151.0 million.

    The foreign exchange reserves held by commercial banks slightly down by $2 million to $7.047 billion by week ended August 13, 2020 as compared with $7.049 billion a week ago.