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Tag: State Bank of Pakistan

  • SBP facilitates exports against advance payment

    SBP facilitates exports against advance payment

    KARACHI: State Bank of Pakistan (SBP) has amended framework related to trade based money laundering in order to facilitate receiving export payment.

    The SBP on Monday issued amendment to Framework for Managing Risks of Trade Based Money Laundering and Terrorist Financing.

    The central bank invited attention of the banks and exchange companies to FE Circular No. 04 dated October 14, 2019 regarding the above subject.

    The SBP said that in order to facilitate export against advance payment, the Para 6(b)(i)(e) of the Framework for Managing Risks of Trade Based Money Laundering and Terrorist Financing has been amended as under:

    “e) Guideline at (a)(c) & (d) above shall be followed while making declaration on Advance Payment Voucher (Appendix V-14). Moreover, it shall be ensured by ADs that in case of exports against advance payment, declaration made on EFE/MFE is strictly in accordance with the particulars declared on Advance Payment Voucher including the name of the consignee. In case advance payment is received from an entity other than the consignee, the ADs shall ensure the same is verified through a swift message or underlying contract and the related risks, including the risk of under/over invoicing are adequately addressed.”

    Prior to amendment the paragraph was read as:

    “e) Guideline at (a)(c) & (d) above shall be followed while making declaration on Advance Payment Voucher (Appendix V-14). Moreover, it shall be ensured by ADs that in case of advance payment export, declaration made on EFE/MFE is strictly in accordance with the particulars declared on Advance Payment Voucher and name of consignee declared on EFE/MFE is of the same entity from which the advance payment is received.”

    The SBP said that all other terms and conditions on the subject shall remain unchanged.

    Further, the instructions related to advance remittance for export of fresh fruits/vegetables as contained in Para 27, Chapter 12 of Foreign Exchange Manual shall also remain unchanged.

    Authorized Dealers are advised to bring the same to the notice of all their constituents.

  • Foreign investment increases to $1.1 billion owing to debt securities attraction

    Foreign investment increases to $1.1 billion owing to debt securities attraction

    KARACHI: Pakistan’s total inflow of foreign investment has increased to $1.1 billion during first four months (July – October) 2019/2020 as compared with outflow of $77.5 million in the corresponding months of the last fiscal year, State Bank of Pakistan (SBP) said on Monday.

    The inflows can be attributed to attractive avenue in the debt securities for foreign participants.

    The total portfolio investment has been recorded at $436.7 million during first four months of the current fiscal year as compared to a negligible amount in the same period of the last fiscal year.

    The total inflow of foreign private investment was at $665.7 million during first four months of the current fiscal year as compared with $77.6 million outflow in the corresponding months of the last fiscal year.

    The foreign direct investment also grew by 238.7 percent to $650 million during period under review as compared with $192 million in the same period of the last fiscal year.

    The inflow of portfolio investment in capital market was recorded at $15.6 million as compared with outflow of $269.5 million.

  • SBP to announce monetary policy on Nov 22

    SBP to announce monetary policy on Nov 22

    KARACHI: State Bank of Pakistan (SBP) will announce monetary policy on Friday, November 22, 2019 for next two months, said a statement on Monday.

    The SBP kept the policy rate unchanged at 13.25 percent in its monetary policy announcement on September 16, 2019.

    In the previous monetary policy, the SBP noted two key developments since the last MPC meeting.

    First, the interbank foreign exchange market had adjusted relatively well to the introduction of the market-based exchange rate system.

    The initial volatility and associated uncertainty in the exchange market had subsided.

    Reflecting these improved sentiments and continued adjustment in the current account, the rupee had strengthened modestly against the US dollar since the last MPC, unlike its previous trend.

    Second, on the external front, the US Fed, as anticipated, reduced its policy rate by 25 basis points (bps), followed by policy rate cuts by other major central banks around the world.

    This would help in lowering pressures on emerging markets’ currencies and potentially increase financial inflows.

  • SBP issues instructions to banks on FX/SWAP trade confirmation

    SBP issues instructions to banks on FX/SWAP trade confirmation

    KARACHI: State Bank of Pakistan (SBP) on Friday issued instructions to banks regarding foreign exchange (FX)/SWAP trade confirmation.

    The SBP said that it had earlier issued instructions through a circular on October 09, 2012 under which the banks provide FX/SWAP trade confirmations duly signed by their authorized signatories, as per standardized hard copy format (hard copy) on the transaction date.

    They are also required to provide SWIFT MT-300 confirmation message (SWIFT message) in addition to said hard copies.

    It has, however, been observed that some of the banks occasionally fail to send said hard copies/ SWIFT messages on the transaction date.

    Such lapses pose serious difficulties in timely verification of trade terms and other trade related details thereby unnecessarily exposing the banks to critical settlement risk.

    The banks are also required to keep this department updated on any changes in their list of authorized signatories along with contact details, however, intermittent non-compliance to these instructions has also been noted.

    In order to ensure smooth settlement process, the banks are advised to:

    Ensure that all SWIFT messages, of a given transaction date, are invariably transmitted to this department with zero tolerance for any leftover SWIFT message.

    This means that transmission date of a SWIFT message should not be later than the trade commitment date (transaction date) of related FX/SWAP trade.

    Further, in order to bring efficiency in the process, transmission of hard copy may be discontinued from now onwards.

    However, submission of hard copy would be mandatory in situations where a bank is unable to transmit SWIFT message due to any reason of whatsoever in nature.
    Submit an updated list of authorized signatories with specimen signatures and contact details, on quarterly basis (format attached).

    Such updated list for quarter ending Jul-Sep19 may be submitted by November 28, 2019. The future reports may be submitted within 10 working days from end of a calendar quarter.

    In case of any future changes of authorized person(s) during a quarter, this department will be immediately notified of such changes but not later than 3 working days.

  • SLR limits not to apply on floating rate PIBs: SBP

    SLR limits not to apply on floating rate PIBs: SBP

    KARACHI: The State Bank of Pakistan (SBP) has notified regulations to Statutory Liquidity Requirement (SLR) eligibility limit on floating rate Pakistan Investment Bonds (PIBs).

    In a circular issued on Friday, the SBP said it is decided that SLR eligibility limit of 15 percent for banks and 5 percent for Development Finance Institutions (DFIs) on Pakistan Investment Bonds (PIBs) shall not be applicable on floating rate PIBs.

    The SBP said that it had issued circulars on March 08, 2018 and May 22, 2004 for banks and Development Finance Institutions (DFIs) respectively.

    All other instructions on the subject will remain same. The above instructions will be effective immediately, the SBP said.

  • Loan disbursement to young entrepreneurs to start from next month

    Loan disbursement to young entrepreneurs to start from next month

    ISLAMABAD: The disbursement of loans to young entrepreneurs will start from next month after completing all the formalities, it was agreed at a meeting on Thursday to review Youth Entrepreneurship Scheme of Kamyab Jawam Programm.

    The meeting agreed that the disbursement of loans to the successful applicants under the scheme would start in December 2019 after completing all the required formalities.

    Muhammad Usman Dar, Special Assistant to the Prime Minister on Youth Affairs; along with Asad Umer, Chairman National Assembly Standing Committee on Finance, chaired a high-level meeting with the representatives from State Bank of Pakistan, Presidents and senior officials of National Bank of Pakistan, Bank of Punjab, and Bank of Khyber to review the processing of loan applications received under Youth Entrepreneurship Scheme (YES) of Kamyab jawan Programme.

    All the three executing banks of the scheme: National Bank of Pakistan, Bank of Punjab, and Bank of Khyber would strengthen their infrastructure both in terms of human resource and technology to cope with the huge challenge of processing one million applications received so far under the scheme.

    Speaking on the occasion, Muhammad Usman Dar reiterated his resolve to strictly follow merit and transparency in the processing and disbursement of loans to the potential entrepreneurs.

    This would not only create number of employment opportunities for youth but would also contribute remarkably to the national economic growth.

    Muhammad Usman Dar appreciated the commitment and efforts of State Bank of Pakistan and the three executing banks: National Bank of Pakistan, Bank of Punjab, and Bank of Khyber, in making this scheme a real game changer for the creation of jobs through the promotion of SME sector in the country.

  • Pakistan’s foreign exchange reserves fall to $15.5 billion

    Pakistan’s foreign exchange reserves fall to $15.5 billion

    KARACHI: Pakistan’s liquid foreign exchange reserves fell by $16 million to $15.502 billion by week ended November 08, 2019 as compared with $15.518 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves held by State Bank increased by $40 million to $8.397 billion by week ended on November 08, 2019 as compared with $8.357 billion a week ago.

    However, the reserves held by commercial banks fell by $56 million to $7.104 billion as compared with $7.16 billion a week ago.

  • SBP penalizes HBL with Rs35.62 million for violating regulations

    SBP penalizes HBL with Rs35.62 million for violating regulations

    KARACHI: State Bank of Pakistan (SBP) has imposed an amount of Rs35.62 million as penalty on Habib Bank Limited (HBL) for violating foreign exchange regulation and customers due diligence.

    According to details of significant enforcement action by the SBP during the month of October 2019 issued on Wednesday, the central bank imposed the penalty on the bank.

    The SBP said that monetary penalty was imposed mainly on deficiencies in the areas of foreign trade operations and customers due diligence.

    “The bank has been advised timelines to bring improvement in the system/controls to avoid recurrence of such lapses / violations in future.”

    With the latest penal action the total amount of penalty during first four months (July – October) 2019 increased to Rs1,158.62 million.

    The SBP has taken penal action against three banks for violating procedures in the areas of Know Your Customer (KYC) and Customers Due Diligence (CDD) and imposed fine to the tune of Rs133.32 million during the month of September 2019.

    The SBP imposed penalty of Rs56.61 million on Askari Bank, Rs63.805 million on Meezan Bank Limited and Rs12.906 million on MCB Islamic Bank Limited.

    In addition to penal action, the banks have been advised to strengthen its process related to KYC/CDD, in order to avoid occurrence of similar violations in future.

    The SBP imposed penalty amounting Rs805.1 million on 10 banks for violating anti-money laundering, due diligence of customers and foreign exchange regulations during the month of August 2019.

    The central bank issued details on Friday about action taken by the SBP against banks in order to plug loopholes in the banking system.

    The SBP initiated to make public the action taken by the central bank from July 2019 against commercial banks for violating prevailing rules and regulations and amount of penalty imposed on such banks.

    In the latest release of enforcement measures by the SBP also included action against leading banks including Habib Bank Limited and MCB Bank etc.

    The highest amount of penalty of Rs320.08 million has been imposed on Habib Bank Limited followed by MCB Bank of Rs159.152 million, Dubai Islamic Bank of Rs77.97 million.

    Following of are the significant enforcement actions by SBP during August-2019.

    01. Dubai Islamic Bank dated August 01 & 02, 2019:

    Violations in the areas of AML/CFT, Asset Quality

    Monetary penalty of Rs77.974 million was imposed mainly on deficiencies in the areas of AML/CFT. Moreover the bank has been advised timelines to rectify the operational lapses and improve the control environment to avoid recurrence of such lapses/violations in future.

    02. Habib Bank Limited dated August 02 & 03, 2019:

    Violations in the areas of AML/CFT, Consumer Protection

    Monetary penalty of Rs320.08 million was imposed mainly on deficiencies in the areas of AML/CFT and erroneous deduction of service charges from customers. The bank has been advised timelines to bring improvements in its systems/controls to avoid recurrence of such lapses/violations in future.

    03. MCB Bank Limited dated August 03, 2019:

    Violations in the areas of AML/CFT, Asset Quality

    Monetary penalty of Rs159.152 million was imposed mainly on deficiencies in the areas of AML/CFT. The bank has been advised timelines to improve the KYC/CDD processes and integrate eKYC system with core banking system.

    04. Silkbank Limited dated August 03, 2019:

    Violations in the areas of AML/KYC, Asset Quality

    Monetary penalty of Rs53.879 million was imposed mainly on violations of non-surrendering of unclaimed deposits, non-classification of loans and adjustment lending. Moreover, the bank has been advised timelines to classify advances & create provision there against and conduct

    05. Bank Alfalah Limited dated August 03, 2019

    Violations in the areas of FX Operations

    Monetary penalty of Rs52.795 million was imposed mainly on violations of foreign exchange regulations such as restrictions to remit import advance payments, export documentation and non-submission of documents against advance payments.

    06. Allied Bank Limited dated August 03, 2019

    Violations in the areas of AML/KYC, Asset Quality

    Monetary penalty of Rs32.755 million was imposed on breach of various limits of Equity Investment/related party and deficiencies in customer due diligence process. The bank has been advised timelines to bring equity Investment and exposure to related party group within the prescribed limit and revise KYC/CDD process.

    07. Sindh Bank Limited dated August 03, 2019

    Violations in the areas of AML/KYC, Asset Quality, FX Operations

    Monetary penalty of Rs15.088 million was imposed mainly on deficiencies in customer due diligence practices, imprudent lending practices, non-classification of loans. Moreover, in view of the strategic deficiencies in Transaction monitoring system & name screening process, the bank has been advised an action plan/timelines for replacement of their existing TMS and acquiring of name screening solution.

    08. Summit Bank Limited dated August 03, 2019

    Violations in the areas of AML/KYC, Asset Quality

    Monetary penalty of Rs13.072 million was imposed mainly on deficiencies in customer due-diligence process, mis-utilization of loans and non classification of loans. The bank has been advised to timely update customer profiles & properly document the reasons of large value transactions.

    09. JS Bank Limited dated August 05, 2019

    Violations in the areas of AML/KYC, Asset Quality, Corporate Governance

    Monetary penalty of Rs70.307 million was imposed mainly on deficiencies in customer due-diligence process, mis-utilization and non classification of loans etc. The bank has been advised timelines to enhance its systems/process for customer risk profiling (CRP), transaction monitoring and identification of Politically Exposed Persons (PEPs).

    10. Habib Metropolitan Bank Limited dated August 19, 2019

    Violations in the areas of FX Operations

    Monetary penalty of Rs10 million was imposed mainly on a violation of foreign exchange regulations relating to splitting of the import advance payments into smaller transactions.

    The SBP imposed penalty of Rs184.64 million upon four commercial banks for violating laws related to Anti-Money Laundering (AML)/Know Your Customer (KYC) during the month of July 2019.

    The central bank on Thursday said that these penalty amount was imposed during the month of July 2019 against banks included: The Bank of Punjab; JS Bank Limited, Bank Al Habib Limited and Soneri Bank.

    The SBP imposed penalty of Rs13.072 million against The Bank of Punjab on July 15, 2019 for violating in areas of foreign exchange operations.

    In addition to penal action, the bank has been advised to improve its internal processes, the SBP said.

    The Bank of Punjab was again penalized with Rs16.119 million on July 18, 2019 for violating in areas of AML/KYC, unclaimed deposits.

    In addition to penal action, the bank has been advised for improvements in the areas of AML/KYC, the central bank added.

    The SBP penalized JS Bank Limited with penalty amount of Rs48.211 million on July 23, 2019 for violating in areas of AML/KYC.

    In addition to penal action, the bank has been advised to conduct a thorough review of relationship accounts, the SBP said.

    The SBP imposed penalty of Rs51.75 million upon Bank Al Habib Limited on July 25, 2019 for violating in areas of AML/KYC, FX Operations.

    In addition to penal action, the bank has been advised to update its systems and processes, and provide appropriate trainings to the concerned officials, the SBP said.

    The SBP imposed penalty of Rs55.48 million upon Soneri Bank Limited on July 25, 2019 for violating in areas of AML/KYC, Asset Quality, FX Operations.

    In addition to penal action, the SBP advised the bank to improve areas of AML/KYC and credit risk monitoring.

  • Overseas Pakistanis send $7.48 billion in four months

    Overseas Pakistanis send $7.48 billion in four months

    KARACHI: Overseas Pakistanis have remitted $7.48 billion during first four months of current fiscal year, which is 1.8 percent lower when compared with $7.62 billion in the corresponding period of the last fiscal year.

    During October 2019, the inflow of workers remittances amounted to US$ 2,000.80 million, which is 14.46 percent higher than September 2019 and 2.88 percent lower than October 2018.

    The country wise details for the month of October 2019 show that inflows from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to US$ 468.18 million, US$ 398.96 million, US$ 322.38 million, US$ 328.69 million, US$ 191.77 million and US$ 60.94 million respectively compared with the inflow of US$ 494.53 million, US$ 419.41 million, US$ 325.19 million, US$ 322.29 million, US$ 200.87 million and US$ 57.42 million respectively in October 2018. Remittances received from Malaysia, Norway, Switzerland, Australia, Canada, Japan and other countries during October 2019 amounted to US$ 229.88 million together as against US$ 240.57 million received in October 2018.