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Tag: State Bank of Pakistan

  • SBP extends date for exchange companies providing information

    SBP extends date for exchange companies providing information

    KARACHI: State Bank of Pakistan (SBP) on Thursday extended the date for exchange companies to submit information of customers related to anti-money laundering (AML) and Counter Financing Terrorism (CFT).

    The central bank amended the Foreign Exchange Circular No. 04 dated October 14, 2019 in this regard.

    The SBP said that in terms of instructions given in Para 5 (a) & (b) of the subject framework, authorized dealers in foreign exchange are required, inter alia, to complete the Risk Profiling of Customers and develop their distinct trade related Risk Profile by April 30, 2020.

    In view of the prevailing circumstances due to COVID-19 outbreak and representation from the banking industry, it has been decided to extend the aforementioned deadline up to September 30, 2020.

    Through the previous notification the SBP stated that in order to strengthen trade related Anti Money Laundering/Combating Financing of Terrorism (AML/CFT) regime and restrict possible misuse of banking channel, a comprehensive framework on the subject has been developed and attached herewith.

    Accordingly, Authorized Dealers (ADs) are advised to upgrade their systems and controls and bring policies and procedures in line with the requirements of the framework to ensure meticulous compliance with the provisions thereof with immediate effect except as otherwise provided in the framework

    The provisions of this framework are in addition to and not a replacement of already issued instructions on the subject of ML/FT risks.

    Therefore, the compliance of the same shall not absolve ADs from their legal and regulatory obligations under prevailing AML/CFT laws/rules and regulations or any other relevant law in force.

    ADs are also advised to educate their clients about their obligation of ensuring (a) correct declaration of particulars on the prescribed forms, (b) utilization of foreign exchange for the exact purpose for which it is acquired by them and (c) repatriation of foreign exchange that represents the full export value of goods. In the event, it is found that material information required to be submitted on the prescribed forms has been omitted or suppressed, foreign exchange is misutilized by a client of an AD or export proceeds repatriated by a client does not represent the full export value of goods, SBP shall initiate penal action against such delinquent parties under relevant provisions of the Foreign Exchange Regulation Act, 1947 (FERA).

    Further, the matter shall also be reported to relevant stakeholders for necessary action under the laws being administered by them.

    Failure to comply with the instructions on the subject and the regulatory obligations of AML/CFT may attract action against ADs under the FERA and other relevant laws.

  • Bank holiday announcement

    Bank holiday announcement

    KARACHI: Banks will remain closed on May 01, 2020 on the occasion of Labour Day as declared holiday by the government.

    State Bank of Pakistan (SBP) on Tuesday issued a circular informing the presidents and chief executives of all banks, development financial institutions and microfinance banks that the central bank will remain closed on May 01, 2020 (Friday) on the occasion of Labour Day as declared by the government.

  • Banks to remain closed for Zakat deduction

    Banks to remain closed for Zakat deduction

    KARACHI: Banks to remain closed for public dealing on Monday due to deduction of Zakat.

    The State Bank of Pakistan (SBP) in a statement said that it will remain closed for public dealing on Monday, April 27, 2020, which shall be observed as “Bank Holiday” for the purpose of deduction of Zakat.

    All banks / DFIs / MFBs shall, therefore, remain closed for public dealing on Monday, April 27, 2020.

    However, all employees of the banks / DFIs / MFBs will attend to their official assignments (in-office or work-from-home, as designated under the current COVID-19 situation) on Bank Holiday treating it as a normal working day (except for public dealing).

  • SBP advises banks to register security interest under STA

    SBP advises banks to register security interest under STA

    KARACHI: State Bank of Pakistan (SBP) on Friday advised banks, microfinance banks and development financial institutions (DFIs) to register their security interest under secured transaction laws.

    The SBP in a circular said that with a view to provide for registration of charge on security/collateral offered by un-incorporated entities including sole proprietorships and partnerships and thereby enhancing their access to finance, The Financial Institutions (Secured Transactions) Act, 2016 (STA) was promulgated on July 1, 2016.

    The government has authorized the Securities and Exchange Commission of Pakistan (SECP) to operate Secured Transactions Registry (STR) to record statements in relation to security interests created by entities under STA. SECP is going to launch the Secured Transactions Registry (STR) under the STA on April 27, 2020 for registration of security interests on movable assets of entities, other than companies.

    In view of the above, all the banks, microfinance banks and DFIs are advised to register their security interests against movable assets of entities for future as well as prior security interests (i.e. security interests created before the operationalization of the STR as provided under section 73 of the STA) in the STR.

    The security interest has been defined as: “a right, title, encumbrance or interest of any kind upon movable property created or provided for by a security agreement in relation to a transaction that in substance secures the payment or performance of a customer’s obligation under a finance without regard to the form of the transaction or the terminology used by the parties or the identity of the person who title to the movable property, and includes any charge, mortgage, hypothecation, fixed charge, floating charge, assignment, lien, pledge, assignment of receivable by way of security and transactions under which a secured creditor retains title such as a finance lease, hire purchase agreement, sale and lease back arrangement, conditional sale agreement and retention of title arrangement, having similar effect.”

  • Bank timings during Ramazan-ul-Mubarak

    Bank timings during Ramazan-ul-Mubarak

    KARACHI: State Bank of Pakistan (SBP) on Friday announced timings for public dealing by banks during the holy month of Ramazan ul Mubarak.

    DaysBusiness (Banking) Hours for Public Dealing
    Monday to Thursday10:00 a.m. to 1:30 p.m. (without break)
    Friday10:00 a.m. to 1:00 p.m. (without break)

    The SBP said that in modification of BPRD Circular Letter No.18 dated April 14, 2020 regarding office timings under measures against COVID-19, it has been decided that SBP will continue to observe the following office hours during the month of Ramazan-ul-Mubarak 1441 A.H., which will also be followed by all banks / DFIs / MFBs:

    DaysOffice Hours
    Monday to Thursday10:00 a.m. to 4:00 p.m. (with prayer break from 2:00 p.m. to 2:15 p.m.)
    Friday10:00 a.m. to 1:00 p.m. (without break)
  • Bank holiday declared on April 27

    Bank holiday declared on April 27

    KARACHI: State Bank of Pakistan (SBP) on Friday announced that banks will remain closed for public dealing for the purpose of deduction of Zakat.

    The central bank said that it will remain closed for public dealing on Monday, April 27, 2020, which shall be observed as “Bank Holiday” for the purpose of deduction of Zakat.

    All banks / DFIs / MFBs shall, therefore, remain closed for public dealing on Monday, April 27, 2020.

    However, all employees of the banks / DFIs / MFBs will attend to their official assignments (in-office or work-from-home, as designated under the current COVID-19 situation) on Bank Holiday treating it as a normal working day (except for public dealing).

  • SBP’s reserves fall to $10.889 billion

    SBP’s reserves fall to $10.889 billion

    KARACHI: The official reserves of State Bank of Pakistan (SBP) have reduced by $85 million to $10.889 billion by week ended April 17, 2020, the central bank said on Thursday.

    The SBP attributed this decline to government external debt payments of $145 million.

    The SBP said that on April 20, 2020, it received $1.39 billion from International Monetary Fund (IMF) under the Rapid Financing Instrument (RFI) to address the economic impact of the Covid-19 shock.

    These funds will be part of SBP weekly reserves data as of 24-April-2020, to be released on 30-April-2020.

    The total liquid foreign reserves held by the country stood at $17.300 million on April 17, 2020. The reserves held by commercial banks were at Rs6.41 billion.

  • SBP issue guidelines to dampen COVID-19 effects, facilitates IBIs customers

    SBP issue guidelines to dampen COVID-19 effects, facilitates IBIs customers

    The State Bank of Pakistan (SBP) has issued comprehensive guidelines to help Islamic Banking Institutions (IBIs) mitigate the economic impact of COVID-19 on their customers.

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  • SBP allows banks to suspend dividend distribution for two quarters

    SBP allows banks to suspend dividend distribution for two quarters

    KARACHI: State Bank of Pakistan (SBP) has allowed banks to suspend distribution of dividends for two quarters as financial institutions may face loan infection amid COVID-19.

    The central bank in a statement on Wednesday said that the banks/DFIs in Pakistan have much higher capital levels than prescribed globally or minimum levels advised by the SBP.

    Accordingly, SBP sees no immediate signs of systemic capital fragility across the banking industry. “However, banks/DFIs have been advised to suspend the dividend distribution for the next two quarters.”

    The banks/DFIs that have approved dividend declaration for quarter ended March 2020 by 22nd April 2020 have been advised to suspend dividend distribution for June and September quarters 2020.

    “All other banks have been advised to suspend dividend distribution for March and June 2020 quarters.”

    “This important decision has been taken keeping in view uncertainty arising out of COVID 19 pandemic and probability of higher infections in loan portfolios of banks as a result of that,” the SBP said.

    This measure will also enhance loss absorption capacity of the banking system and will enable them to further support the real sector in Pakistan.

    Notably, while releasing prescribed capital buffers and taking other regulatory relief measures, a number of other jurisdictions across the globe have also placed moratorium on dividend distribution and payment of cash bonuses to senior/executive officers and material risk takers.

    The SBP is confident that the suspension of dividend payout will further increase the resilience of banking sector and improve their ability to provide much needed credit support to the real economy.

    SBP will keep on closely monitoring the performance of banks/DFIs under its regulatory domain and take appropriate action as needed to ensure safety and soundness of individual banks/DFIs and the overall banking system.

    The central bank in a statement on Wednesday said that amid the growing concerns of COVID – 19 pandemic, the SBP, thus far, announced a number of regulatory relief measures for the financial sector and real economy.

    These measures are primarily aimed at ensuring the safety and soundness of banking sector while enhancing their lending capacity to support the economic activities in the country.