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Banking Industries Updates
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IMF's new SDR allocation could bolster Pakistan's forex reserves by $2.8 billion: Fitch
Ali Ahmed
28 Jun 2021
The new expected allocation of International Monetary Fund's (IMF) special drawing rights (SDR) could bolster Pakistan’s reserves by $2.8 billion, said Fitch Ratings on Monday.
In its 'External Liquidity Strains Ease in Some APAC Frontier Economies' report, Fitch Ratings said Pakistan has benefited from the disbursement of IMF resources under its Extended Fund Facility, and more recently from Saudi Arabia’s agreement in June to an oil assistance package.
"In the last six months, official reserves have risen in most of Asia-Pacific’s frontier economies - defined in this context as Bangladesh (BB-/Stable), Laos, the Maldives (CCC), Mongolia (B/Stable), Pakistan (B-/Stable) and Sri Lanka. Sri Lanka is the sole exception, with reserves falling to $4 billion by end-May 2021.
It added that all six of these frontier markets should benefit from the expected new allocation of SDR by the IMF.
"Most notably, it could bolster Sri Lanka’s reserves by $780 million and by $2.8 billion in Pakistan. We expect the IMF’s board of governors to approve the allocation in August."
IMF First Deputy Managing Director Geoffrey Okamoto in April said that the Fund intends to distribute the $650-billion allocation of SDR monetary reserves to member countries this summer.
Pakistan FX reserves stood at $23.26 billion during the week ended June 18, 2021. On a week-on-week basis, total reserves held by the country decreased around $330 million compared to the total figure of around $23.6 billion in the week ended on June 11, 2021. Meanwhile, reserves with the SBP fell 2.2 percent or $311 million in the week ended June 18, 2021 compared to the week before. The fall was attributed to external debt repayments.
"In Pakistan, the government’s adherence to a market-determined exchange-rate regime will continue to serve as a shock-absorber, and should help keep the current-account deficit contained," said Fitch.
"Pandemic-related trade distortions are likely to ebb in the coming months with the rollout of vaccine programmes globally, but this process could be lengthy in countries where vaccination moves slowly."
Fitch said remittances have been another source of support to Pakistan's external positions since the start of the pandemic, and remain surprisingly strong.
- IMF's board of governors expected to approve allocation in August
Ali Ahmed
28 Jun 2021
The new expected allocation of International Monetary Fund's (IMF) special drawing rights (SDR) could bolster Pakistan’s reserves by $2.8 billion, said Fitch Ratings on Monday.
In its 'External Liquidity Strains Ease in Some APAC Frontier Economies' report, Fitch Ratings said Pakistan has benefited from the disbursement of IMF resources under its Extended Fund Facility, and more recently from Saudi Arabia’s agreement in June to an oil assistance package.
"In the last six months, official reserves have risen in most of Asia-Pacific’s frontier economies - defined in this context as Bangladesh (BB-/Stable), Laos, the Maldives (CCC), Mongolia (B/Stable), Pakistan (B-/Stable) and Sri Lanka. Sri Lanka is the sole exception, with reserves falling to $4 billion by end-May 2021.
It added that all six of these frontier markets should benefit from the expected new allocation of SDR by the IMF.
"Most notably, it could bolster Sri Lanka’s reserves by $780 million and by $2.8 billion in Pakistan. We expect the IMF’s board of governors to approve the allocation in August."
IMF First Deputy Managing Director Geoffrey Okamoto in April said that the Fund intends to distribute the $650-billion allocation of SDR monetary reserves to member countries this summer.
Pakistan FX reserves stood at $23.26 billion during the week ended June 18, 2021. On a week-on-week basis, total reserves held by the country decreased around $330 million compared to the total figure of around $23.6 billion in the week ended on June 11, 2021. Meanwhile, reserves with the SBP fell 2.2 percent or $311 million in the week ended June 18, 2021 compared to the week before. The fall was attributed to external debt repayments.
"In Pakistan, the government’s adherence to a market-determined exchange-rate regime will continue to serve as a shock-absorber, and should help keep the current-account deficit contained," said Fitch.
"Pandemic-related trade distortions are likely to ebb in the coming months with the rollout of vaccine programmes globally, but this process could be lengthy in countries where vaccination moves slowly."
Fitch said remittances have been another source of support to Pakistan's external positions since the start of the pandemic, and remain surprisingly strong.
ghazi52
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E-banking transactions increase 31% year-on-year during Jan-Mar: SBP
Ali Ahmed
28 Jun 2021
Digital financial transactions continued to march upwards in Pakistan, with mobile and internet banking users showing considerable increase during the third quarter of the outgoing fiscal year, stated the State Bank of Pakistan's (SBP) Quarterly Payment System Review released on Monday.
During the three-month period between January and March 2021, bank customers performed 309.5 million e-Banking transactions, valuing Rs22.5 trillion and registering growth rates of 31 percent by volume and 29 percent by value over the same quarter last year, according to the report.
"Most of the uptake in e-banking transactions was seen in internet banking and mobile banking transactions," stated the SBP.
The volume of mobile banking transactions reached 51.7 million, (up 144 percent) valuing Rs1.3 trillion (up 178 percent) compared to 21.2 million transactions valuing 467.5 billion in the same quarter last year. The number of registered mobile phone banking users reached 9.8 million showing an increase of 20% from the same period last year.
Similarly, 24.5 million internet banking transactions valuing Rs1.5 trillion were recorded during this period compared to Rs0.75 trillion in the same quarter last year, registering a growth of 74% by volume and 109% by value.
On a quarterly basis, the report found that overall, the country’s total payment transactions increased by 2% in volume and 10% in value i.e. 402.5 million and Rs 153.6 trillion respectively. The transaction value for PRISM increased from Rs94.9 trillion in the previous quarter to Rs 109.3 trillion in the current quarter showing a growth of 15%.
The overall use of e-Banking channels has seen an increase of 4% in volume and 5% in value over the previous quarter. The number of paper-based transactions have decreased from the previous quarters, which as per the central bank can be inferred from increase in usage of digital channels by general consumers.
The report found that the number of internet and mobile banking users have also shown considerable rise during the last few quarters.
During the third quarter the internet banking users stood at 4.97 million showing an increase by 10% when compared with the previous quarter, and an increase of 30% when compared with the same quarter last year. Similarly, mobile banking users have increased by 5% quarter on quarter growing to 9.85 million, while showing an increase of 20% when compared with the same period last year.
E-commerce merchants are also on an inclining trend in the last few quarters. When compared with the previous quarter, e-commerce merchants have increased by 5% to 2,523 users, however, comparing with the same period last year, a staggering growth of 62% has been observed.
“The numbers can clearly lead us to be believe the consumers are realizing the benefits that digital payment channels have in our daily lives. This complements the increase in the trust of the consumers in usage of digital channels.
“This could have not been possible without the continuous efforts by SBP to digitize the economy which has the potential to change overall payments landscape of the country for the better,” said the report.
Coming to the deployment of payment infrastructure, the commercial banks has deployed 16,175 ATMs in the country, an increase of 134 ATMs during the quarter. Meanwhile, the banking industry has deployed more than 4,000 POS (Point of Sale) machines, reaching to an all-time high number of 67,099.
Bank branches
With regards to physical presence, the report said that there are 16,223 bank branches reported by Banks/MFBs, out of which 107 are overseas branches.
"All branches, except 35, are providing online banking services to their customers.
"We have observed a decline in the number of branches, showing that the industry is slowly realizing the benefits of digital payment infrastructure that the digital channels bring to the overall consumer experience and its impact on the bottom line."
- Says customers performed 309.5 million e-banking transactions in three-month period, up 31% by volume and 29% by value year-on-year
Ali Ahmed
28 Jun 2021
Digital financial transactions continued to march upwards in Pakistan, with mobile and internet banking users showing considerable increase during the third quarter of the outgoing fiscal year, stated the State Bank of Pakistan's (SBP) Quarterly Payment System Review released on Monday.
During the three-month period between January and March 2021, bank customers performed 309.5 million e-Banking transactions, valuing Rs22.5 trillion and registering growth rates of 31 percent by volume and 29 percent by value over the same quarter last year, according to the report.
"Most of the uptake in e-banking transactions was seen in internet banking and mobile banking transactions," stated the SBP.
The volume of mobile banking transactions reached 51.7 million, (up 144 percent) valuing Rs1.3 trillion (up 178 percent) compared to 21.2 million transactions valuing 467.5 billion in the same quarter last year. The number of registered mobile phone banking users reached 9.8 million showing an increase of 20% from the same period last year.
Similarly, 24.5 million internet banking transactions valuing Rs1.5 trillion were recorded during this period compared to Rs0.75 trillion in the same quarter last year, registering a growth of 74% by volume and 109% by value.
On a quarterly basis, the report found that overall, the country’s total payment transactions increased by 2% in volume and 10% in value i.e. 402.5 million and Rs 153.6 trillion respectively. The transaction value for PRISM increased from Rs94.9 trillion in the previous quarter to Rs 109.3 trillion in the current quarter showing a growth of 15%.
The overall use of e-Banking channels has seen an increase of 4% in volume and 5% in value over the previous quarter. The number of paper-based transactions have decreased from the previous quarters, which as per the central bank can be inferred from increase in usage of digital channels by general consumers.
The report found that the number of internet and mobile banking users have also shown considerable rise during the last few quarters.
During the third quarter the internet banking users stood at 4.97 million showing an increase by 10% when compared with the previous quarter, and an increase of 30% when compared with the same quarter last year. Similarly, mobile banking users have increased by 5% quarter on quarter growing to 9.85 million, while showing an increase of 20% when compared with the same period last year.
E-commerce merchants are also on an inclining trend in the last few quarters. When compared with the previous quarter, e-commerce merchants have increased by 5% to 2,523 users, however, comparing with the same period last year, a staggering growth of 62% has been observed.
“The numbers can clearly lead us to be believe the consumers are realizing the benefits that digital payment channels have in our daily lives. This complements the increase in the trust of the consumers in usage of digital channels.
“This could have not been possible without the continuous efforts by SBP to digitize the economy which has the potential to change overall payments landscape of the country for the better,” said the report.
Coming to the deployment of payment infrastructure, the commercial banks has deployed 16,175 ATMs in the country, an increase of 134 ATMs during the quarter. Meanwhile, the banking industry has deployed more than 4,000 POS (Point of Sale) machines, reaching to an all-time high number of 67,099.
Bank branches
With regards to physical presence, the report said that there are 16,223 bank branches reported by Banks/MFBs, out of which 107 are overseas branches.
"All branches, except 35, are providing online banking services to their customers.
"We have observed a decline in the number of branches, showing that the industry is slowly realizing the benefits of digital payment infrastructure that the digital channels bring to the overall consumer experience and its impact on the bottom line."
ghazi52
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National Assembly Approves Budget 2021-22
June 29, 2021
ISLAMABAD (92 News) – The National Assembly approved the Budget 2021-22 with a majority on Tuesday.
The House granted section-wise approval of the Finance Bill, rejecting amendments of the opposition presented by the opposition. As many as 172 lawmakers voted in favour of the motion presenting the budget, while 138 members voted against the motion.
Prime Minister Imran Khan also participated in the session.
In his speech, Finance Minister Shaukat Tarin said that they are doers of work, not only among the people who just talk. "The government has reduced taxes on several items. The opposition should tell about the indirect taxes imposed by the government," he maintained.
The minister said that the government has first time given a roadmap to the poor in 74 years. "The cover inflation is still seven percent, while the food inflation has increased," he said.
"The prices of food items can only be reduced by promoting agriculture. The government had to approach the IMF due to the deficit left by the previous government," he maintained.
He said that about 15 million people deliberately do not pay the taxes. "The people not paying the taxes will be arrested," he declared.
In a tweet, State Minister for Information Furrukh Habib said that they are thankful to all government members and allies who passed the budget with a majority.
National Assembly approves Budget 2021-22
ISLAMABAD (92 News) – The National Assembly approved the Budget 2021-22 with a majority on Tuesday.
92newshd.tv
June 29, 2021
ISLAMABAD (92 News) – The National Assembly approved the Budget 2021-22 with a majority on Tuesday.
The House granted section-wise approval of the Finance Bill, rejecting amendments of the opposition presented by the opposition. As many as 172 lawmakers voted in favour of the motion presenting the budget, while 138 members voted against the motion.
Prime Minister Imran Khan also participated in the session.
In his speech, Finance Minister Shaukat Tarin said that they are doers of work, not only among the people who just talk. "The government has reduced taxes on several items. The opposition should tell about the indirect taxes imposed by the government," he maintained.
The minister said that the government has first time given a roadmap to the poor in 74 years. "The cover inflation is still seven percent, while the food inflation has increased," he said.
"The prices of food items can only be reduced by promoting agriculture. The government had to approach the IMF due to the deficit left by the previous government," he maintained.
He said that about 15 million people deliberately do not pay the taxes. "The people not paying the taxes will be arrested," he declared.
In a tweet, State Minister for Information Furrukh Habib said that they are thankful to all government members and allies who passed the budget with a majority.
"Those claiming of rejecting the budget could not bring the opposition members to the assembly. Their balloon of opposition and resistance has been deflated," he maintained.
National Assembly approves Budget 2021-22
ISLAMABAD (92 News) – The National Assembly approved the Budget 2021-22 with a majority on Tuesday.
ghazi52
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GDP, PPP (current international $) - Pakistan
International Comparison Program, World Bank | World Development Indicators database, World Bank | Eurostat-OECD PPP Programme.
Pakistan (1996)
312.858 Billion
1990 - 2019
CSVXMLEXCEL DataBank
Online tool for visualization and analysis
Country............ Most Recent Year................Most Recent Value (Millions)
Pakistan...........2019.....................................1,060,747.88
International Comparison Program, World Bank | World Development Indicators database, World Bank | Eurostat-OECD PPP Programme.
Pakistan (1996)
312.858 Billion
1990 - 2019
CSVXMLEXCEL DataBank
Online tool for visualization and analysis
Country............ Most Recent Year................Most Recent Value (Millions)
Pakistan...........2019.....................................1,060,747.88
ghazi52
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President signs Finance Bill 2021-22
The Frontier Post
ISLAMABAD (APP): President Dr Arif Alvi has signed the Finance Bill 2021-22 which now has become the Finance Act.
The president has accorded his approval over the bill, a press release said on Wednesday. The Finance Bill 2021-22 was moved in the National Assembly on Tuesday which was passed by a majority vote.
The Frontier Post
ISLAMABAD (APP): President Dr Arif Alvi has signed the Finance Bill 2021-22 which now has become the Finance Act.
The president has accorded his approval over the bill, a press release said on Wednesday. The Finance Bill 2021-22 was moved in the National Assembly on Tuesday which was passed by a majority vote.
ghazi52
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Rupee comes out of sudden swings, banks on foreign inflows
Erum Zaidi
July 1, 2021
KARACHI: The rupee comes out of sudden swings and is expected to remain stable during the current fiscal year because of being market-determined, although it may lose further value on anemic foreign inflows, analysts said on Wednesday.
In interbank trade, rupee appreciated by 6.25 percent in FY2021. On Wednesday, the rupee closed at 157.54 per dollar, 0.13 percent stronger than the previous close of 157.7 in the interbank market.
In the open market, the rupee rose by Rs10 or six percent. The rupee ended at 158 to the dollar, compared with 158.20 on Tuesday. It closed at 168.05 on June 30.
However, the rupee is forecast to trade at 160 and 166 by this yearend and June 2022, respectively, according to analysts.
The rupee will remain relatively stable as it’s a market determined now “so we may not witness exorbitant swings up or downs,” said Mustafa Mustansir, head of Research at Taurus Securities Limited.
“Remittances, further disbursement from the IMF and the export growth would make the rupee strong,” Mustansir said. “We expect the rupee to devalue in FY2022. So far, our expectation is 2.5 percent devaluation from current level but it could be more than that also with remittances growth to slow down in FY2022 along with a surge in trade deficit, and this would put pressure on rupee.”
Saad Hashemy, executive director at BMA Capital sees the rupee to remain stable in the near term based on rising foreign exchange reserves.
“FX reserves have now risen to over $16 billion (with SBP) compared to around $12 billion in the beginning of the fiscal year. Key risks to this outlook would be the external current account performance, which will in turn depend on oil/commodity prices and performance of exports,” Hashemy said.
“We'll see some outflow of dollars putting pressure on the rupee. And finally, Pakistan would need to resume making loan repayments also.”
The continuation of a deferred oil supply deal worth $1.5 billion and $4.5 billion new framework agreement with the International Islamic Trade Finance Corporation from Pakistan to finance oil, liquefied natural gas and fertilizer imports could provide some relief to the foreign exchange reserves. Remittances rose 29 percent to $26.7 billion in July-May FY2021.
The rupee is also expected to take a cue from the central bank’s monetary policy direction. Interest rates are likely to hike towards the last quarter of 2021.
During the year, Pakistan successfully concluded $2.5 billion of Eurobond issuance while also resumed the earlier stalled IMF programme.
The current account balance showed a surplus of $153 million in 11 months of FY2021 against a deficit of $4.328 billion in the previous year.
The current account deficit is predicted to reach $8 billion or 3 percent of GDP in FY2022. The government has lifted all coronavirus-related restrictions amid substantial drop in the infection cases, which will result in increase in domestic demand and more imports.
Pakistan has to resume the suspended loan repayments to G-20 countries from January next year. G-20 countries suspended the repayment of $3.7 billion loan by Pakistan, under the debt service suspension initiative, till the end of this year.
Erum Zaidi
July 1, 2021
KARACHI: The rupee comes out of sudden swings and is expected to remain stable during the current fiscal year because of being market-determined, although it may lose further value on anemic foreign inflows, analysts said on Wednesday.
In interbank trade, rupee appreciated by 6.25 percent in FY2021. On Wednesday, the rupee closed at 157.54 per dollar, 0.13 percent stronger than the previous close of 157.7 in the interbank market.
In the open market, the rupee rose by Rs10 or six percent. The rupee ended at 158 to the dollar, compared with 158.20 on Tuesday. It closed at 168.05 on June 30.
However, the rupee is forecast to trade at 160 and 166 by this yearend and June 2022, respectively, according to analysts.
The rupee will remain relatively stable as it’s a market determined now “so we may not witness exorbitant swings up or downs,” said Mustafa Mustansir, head of Research at Taurus Securities Limited.
“Remittances, further disbursement from the IMF and the export growth would make the rupee strong,” Mustansir said. “We expect the rupee to devalue in FY2022. So far, our expectation is 2.5 percent devaluation from current level but it could be more than that also with remittances growth to slow down in FY2022 along with a surge in trade deficit, and this would put pressure on rupee.”
Saad Hashemy, executive director at BMA Capital sees the rupee to remain stable in the near term based on rising foreign exchange reserves.
“FX reserves have now risen to over $16 billion (with SBP) compared to around $12 billion in the beginning of the fiscal year. Key risks to this outlook would be the external current account performance, which will in turn depend on oil/commodity prices and performance of exports,” Hashemy said.
“We'll see some outflow of dollars putting pressure on the rupee. And finally, Pakistan would need to resume making loan repayments also.”
The continuation of a deferred oil supply deal worth $1.5 billion and $4.5 billion new framework agreement with the International Islamic Trade Finance Corporation from Pakistan to finance oil, liquefied natural gas and fertilizer imports could provide some relief to the foreign exchange reserves. Remittances rose 29 percent to $26.7 billion in July-May FY2021.
The rupee is also expected to take a cue from the central bank’s monetary policy direction. Interest rates are likely to hike towards the last quarter of 2021.
During the year, Pakistan successfully concluded $2.5 billion of Eurobond issuance while also resumed the earlier stalled IMF programme.
The current account balance showed a surplus of $153 million in 11 months of FY2021 against a deficit of $4.328 billion in the previous year.
The current account deficit is predicted to reach $8 billion or 3 percent of GDP in FY2022. The government has lifted all coronavirus-related restrictions amid substantial drop in the infection cases, which will result in increase in domestic demand and more imports.
Pakistan has to resume the suspended loan repayments to G-20 countries from January next year. G-20 countries suspended the repayment of $3.7 billion loan by Pakistan, under the debt service suspension initiative, till the end of this year.
ghazi52
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SBP amends foreign exchange regulations to facilitate exports
Ali Ahmed
02 Jul 2021
https://www.facebook.com/sharer/sha...er.com/news/40104609&display=popup&ref=plugin
The SBP said that it has notified revisions in foreign exchange regulations for export of goods from Pakistan (Chapter 12 of the Foreign Exchange Manual).
The key changes include amendments in regulations to facilitate export transactions through the Pakistan Single Window when it becomes operational. This will eliminate the requirement of Electronic Form-E (EFE) for carrying out exports from Pakistan, the central bank said.
Another key amendment introduced in the revised export regulations is the framework for facilitating Pakistani exporters/ entrepreneurs to sell their products through international digital marketplaces including Amazon, e-Bay, Ali Baba under Business to Business to Consumer (B2B2C) eCommerce model.
The SBP was of the view that these regulations would pave way for Pakistani exporters particularly the SME exporters to reach out to millions of international consumers for selling their products, and would open up window of new opportunities for the Pakistani business community.
The SBP is in process of revising the foreign exchange regulations, in a phased manner, with the objective to promote ease of doing business by simplifying the existing instructions, removing the redundancies and delegating more powers to the Authorized Dealers for facilitation of the stakeholders.
Earlier, SBP and Pakistan Customs had joined hands in 2015 and switched from manual export form to electronic export form by implementing EFE Module in WeBOC system. EFE is an electroni declaration submitted by exporters to the Pakistan Customs and is required before filing of Goods Declaration to the Pakistan Customs for clearance of each export consignment.
However, once the Pakistan Single Window (PSW) becomes operational, the requirement for EFE will be eliminated thus enhancing ease of doing business for exporters.
The State Bank says that the PSW system is a facility that will allow parties involved in trade and transport to lodge standardized information and documents with a single-entry point to fulfil all import, export, and transit-related regulatory requirements.
The system will help reduce the time and cost of doing business by making trade related business processes more efficient, transparent and consistent.
Ali Ahmed
02 Jul 2021
https://www.facebook.com/sharer/sha...er.com/news/40104609&display=popup&ref=plugin
The SBP said that it has notified revisions in foreign exchange regulations for export of goods from Pakistan (Chapter 12 of the Foreign Exchange Manual).
The key changes include amendments in regulations to facilitate export transactions through the Pakistan Single Window when it becomes operational. This will eliminate the requirement of Electronic Form-E (EFE) for carrying out exports from Pakistan, the central bank said.
Another key amendment introduced in the revised export regulations is the framework for facilitating Pakistani exporters/ entrepreneurs to sell their products through international digital marketplaces including Amazon, e-Bay, Ali Baba under Business to Business to Consumer (B2B2C) eCommerce model.
The SBP was of the view that these regulations would pave way for Pakistani exporters particularly the SME exporters to reach out to millions of international consumers for selling their products, and would open up window of new opportunities for the Pakistani business community.
The SBP is in process of revising the foreign exchange regulations, in a phased manner, with the objective to promote ease of doing business by simplifying the existing instructions, removing the redundancies and delegating more powers to the Authorized Dealers for facilitation of the stakeholders.
Earlier, SBP and Pakistan Customs had joined hands in 2015 and switched from manual export form to electronic export form by implementing EFE Module in WeBOC system. EFE is an electroni declaration submitted by exporters to the Pakistan Customs and is required before filing of Goods Declaration to the Pakistan Customs for clearance of each export consignment.
However, once the Pakistan Single Window (PSW) becomes operational, the requirement for EFE will be eliminated thus enhancing ease of doing business for exporters.
The State Bank says that the PSW system is a facility that will allow parties involved in trade and transport to lodge standardized information and documents with a single-entry point to fulfil all import, export, and transit-related regulatory requirements.
The system will help reduce the time and cost of doing business by making trade related business processes more efficient, transparent and consistent.
ghazi52
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SBP appoints 13 banks as PDs of govt securities for FY 21-22
The Frontier Post
KARACHI (APP): The State Bank of Pakistan appointed 13 banks as Primary Dealers (PDs) of government securities and two companies as Special Purpose Primary Dealers (SPDs) for Financial Year 2021-22.
According to a circular issued by Domestic Market and Monetary Management Department of SBP, after evaluation of received applications under the laid down criteria the central bank has selected 13 applicants for appointment as primary dealer while 2 other institutions were selected for the role of SPDs of government securities-PIB and MTB.
Primary Dealers appointed for FY 2021-22 included Habib Bank Limited, Allied Bank Limited, Bank Al-Falah Limited, JS Bank Limited, National Bank of Pakistan, MCB Bank Limited, United Bank Limited, Pak Oman Investment Company Limited, Faysal Bank limited, Standard Chartered Bank (Pakistan) Limited, The Bank of Punjab, Citi Bank N.A-Pakistan Operations and Industrial and Commercial Bank Of China-Pakistan.
National Clearing Company of Pakistan Limited and Central Depository Company of Pakistan were appointed as Special Purpose Primary Dealers.
The performances of PDs, PPDs and SPDs were evaluated by the central bank in accordance with their respective Performance Evaluation Criteria and the SBP announce top performing PDs and PPDs vide a Circular on annual basis.
Top three performing PDs during FY 2020-21 were Habib Bank Limited, Allied Bank of Pakistan and Bank Al-Falah Limited, the circular stated.
All the dealers are supposed to actively participate in the primary market by bidding in the auctions of Government securities as conducted by SBP from time to time with a view to improve participation in primary auctions, enhance distribution, diversify investor-base and develop market for government securities.
They also distribute government securities to non-PD banks and other retail or institutional clients. Additionally, PDs and PPDs shall also act as market makers in Government securities by quoting two-way prices in the secondary market.
The PDs, PPDs and SPDs were required to continuously upgrade their infrastructure in terms of both physical equipment and skilled manpower so that they could play an active role in Government securities market development for enhancing liquidity and turnover and widen the investor base of Government securities by creating awareness among investors and taking other meaningful initiatives.
Besides, they were also required to provide efficient custody services to its customers (Investor’s Portfolio of Securities Accounts) for Government securities holding, collection and, payment of profits and maturity proceeds.
To incentivize performance of their roles and obligations dealers were offered privileges like direct access to primary auctions and buyback auctions, right to submit pass-through bids and Non-Competitive Bids (NCBs), claim commission on underwriting and mobilizing NCBs in the primary auctions and option to purchase additional securities for their own account through Non-Competitive Subscriptions (NCS).
The dealers have to comply with certain obligations as well which included mandatory participation in each auction, minimum underwriting commitment, quoting two-way prices as per the defined maximum bid-ask spreads and lot-sizes, among others.
The Frontier Post
KARACHI (APP): The State Bank of Pakistan appointed 13 banks as Primary Dealers (PDs) of government securities and two companies as Special Purpose Primary Dealers (SPDs) for Financial Year 2021-22.
According to a circular issued by Domestic Market and Monetary Management Department of SBP, after evaluation of received applications under the laid down criteria the central bank has selected 13 applicants for appointment as primary dealer while 2 other institutions were selected for the role of SPDs of government securities-PIB and MTB.
Primary Dealers appointed for FY 2021-22 included Habib Bank Limited, Allied Bank Limited, Bank Al-Falah Limited, JS Bank Limited, National Bank of Pakistan, MCB Bank Limited, United Bank Limited, Pak Oman Investment Company Limited, Faysal Bank limited, Standard Chartered Bank (Pakistan) Limited, The Bank of Punjab, Citi Bank N.A-Pakistan Operations and Industrial and Commercial Bank Of China-Pakistan.
National Clearing Company of Pakistan Limited and Central Depository Company of Pakistan were appointed as Special Purpose Primary Dealers.
The performances of PDs, PPDs and SPDs were evaluated by the central bank in accordance with their respective Performance Evaluation Criteria and the SBP announce top performing PDs and PPDs vide a Circular on annual basis.
Top three performing PDs during FY 2020-21 were Habib Bank Limited, Allied Bank of Pakistan and Bank Al-Falah Limited, the circular stated.
All the dealers are supposed to actively participate in the primary market by bidding in the auctions of Government securities as conducted by SBP from time to time with a view to improve participation in primary auctions, enhance distribution, diversify investor-base and develop market for government securities.
They also distribute government securities to non-PD banks and other retail or institutional clients. Additionally, PDs and PPDs shall also act as market makers in Government securities by quoting two-way prices in the secondary market.
The PDs, PPDs and SPDs were required to continuously upgrade their infrastructure in terms of both physical equipment and skilled manpower so that they could play an active role in Government securities market development for enhancing liquidity and turnover and widen the investor base of Government securities by creating awareness among investors and taking other meaningful initiatives.
Besides, they were also required to provide efficient custody services to its customers (Investor’s Portfolio of Securities Accounts) for Government securities holding, collection and, payment of profits and maturity proceeds.
To incentivize performance of their roles and obligations dealers were offered privileges like direct access to primary auctions and buyback auctions, right to submit pass-through bids and Non-Competitive Bids (NCBs), claim commission on underwriting and mobilizing NCBs in the primary auctions and option to purchase additional securities for their own account through Non-Competitive Subscriptions (NCS).
The dealers have to comply with certain obligations as well which included mandatory participation in each auction, minimum underwriting commitment, quoting two-way prices as per the defined maximum bid-ask spreads and lot-sizes, among others.
ghazi52
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ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has made amendments to National Clearing Company Pakistan Ltd Regulations 2015 to improve margin financing (MF) products.
The SECP claims that MF reforms will allow the securities brokers to provide financing to their customers in a more regulated manner and will facilitate investors who wish to undertake leveraged trading and need finance for purchasing shares. As a result, position limits and exposure limits have been liberalised to allow more liquidity.
However, the reforms have failed to impress some stakeholders who think the situation will remain the same.
Now the MF facility will also be available to investors against their net purchases at expiry of Deliverable Futures Contracts allowing them to honour their settlement obligations in futures segment, thereby further reducing settlement risk.
For meeting the funding needs of investors, the MF facility will now be available on T+1 against their net purchases in ready market segment.
Moreover, MF financiers can now collect market-to-market (MTM) losses in any manner mutually agreed under the financing agreement signed with the borrower instead of the earlier stipulated mandatory collection of MTM losses in cash only in case of 5 per cent decline in MF financed security value.
Further, the brokers that meeting specified eligibility requirements shall be allowed to pledge 75pc MF financed securities in favour of National Clearing Company Pakistan Ltd (NCCPL) to fulfill margin requirements against exposure in the ready market.
The SECP has said that the MF financiers will be allowed to release an MF transaction and rollover with revised MF transaction value after adjusting MTM losses and any payment received from their investors.
The reforms have been approved after due consideration to any incremental risks and implementation of appropriate risk mitigating features, and were finalised as a result of comprehensive stakeholder consultation.
Whereas, the stockbrokers claim that the amendments made by the SECP is less likely to yield any result.
“The core issue is that the NCCPL was not allowing direct financing by the banking sector, whereas the fact is that the bulk of funds are available with the banks only,” said Munir Khanani, senior member Pakistan Stockbrokers Association, “What we see is that the NPCCL wants to introduce its terms for the banks whereas the banking sector has its own regulator – the State Bank of Pakistan and they have their own system of financial risk mitigation.”
Mr Khanani said that it was imperative that all the relevant regulators including the SBP, SECP, NCCPL are needed to sit together with the stakeholders to find a solution to MF issues.
Published in Dawn, July 4th, 2021
The SECP claims that MF reforms will allow the securities brokers to provide financing to their customers in a more regulated manner and will facilitate investors who wish to undertake leveraged trading and need finance for purchasing shares. As a result, position limits and exposure limits have been liberalised to allow more liquidity.
However, the reforms have failed to impress some stakeholders who think the situation will remain the same.
Now the MF facility will also be available to investors against their net purchases at expiry of Deliverable Futures Contracts allowing them to honour their settlement obligations in futures segment, thereby further reducing settlement risk.
For meeting the funding needs of investors, the MF facility will now be available on T+1 against their net purchases in ready market segment.
Moreover, MF financiers can now collect market-to-market (MTM) losses in any manner mutually agreed under the financing agreement signed with the borrower instead of the earlier stipulated mandatory collection of MTM losses in cash only in case of 5 per cent decline in MF financed security value.
Further, the brokers that meeting specified eligibility requirements shall be allowed to pledge 75pc MF financed securities in favour of National Clearing Company Pakistan Ltd (NCCPL) to fulfill margin requirements against exposure in the ready market.
The SECP has said that the MF financiers will be allowed to release an MF transaction and rollover with revised MF transaction value after adjusting MTM losses and any payment received from their investors.
The reforms have been approved after due consideration to any incremental risks and implementation of appropriate risk mitigating features, and were finalised as a result of comprehensive stakeholder consultation.
Whereas, the stockbrokers claim that the amendments made by the SECP is less likely to yield any result.
“The core issue is that the NCCPL was not allowing direct financing by the banking sector, whereas the fact is that the bulk of funds are available with the banks only,” said Munir Khanani, senior member Pakistan Stockbrokers Association, “What we see is that the NPCCL wants to introduce its terms for the banks whereas the banking sector has its own regulator – the State Bank of Pakistan and they have their own system of financial risk mitigation.”
Mr Khanani said that it was imperative that all the relevant regulators including the SBP, SECP, NCCPL are needed to sit together with the stakeholders to find a solution to MF issues.
Published in Dawn, July 4th, 2021
ghazi52
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RDA fetches $1.5bn inflows in nine months
Recorder Report
04 Jul 2021
KARACHI: Roshan Digital Account (RDA) has fetched foreign inflows amounted to $1.5 billion during the nine months.
In line with SBP’s commitment to transparency in its key policy measures, SBP from Saturday has begun releasing regular data on the progress of Roshan Digital Account (RDA). Based on individual reports of banks that participate in RDA, the data has been consolidated and made available to the public through a new web page, which will be updated on a monthly basis. This periodic update was also requested by market participants.
Since its launch by the Prime Minister of Pakistan on 10th September 2020, Roshan Digital Account has attracted significant interest from overseas Pakistanis. According to the new web page released Saturday, 181,556 accounts have been opened from 171 countries across the world and $1.562 billion has been deposited in these accounts through end-June 2021.
The webpage shows monthly trends in the number of accounts opened, deposits, and investments in Naya Pakistan Certificates (NPCs) and the stock market. The data shows an accelerating trend across all these dimensions over the last few months. June 2021 saw the highest monthly number of deposits (USD 310 million) and NPC investments (USD 233 million) since the launch of Roshan Digital Account. As of end-June 2021, USD 1050 million has been invested in NPCs, with USD621 million in conventional NPCs and USD429 million in Islamic NPCs.
Roshan Digital Account is a landmark initiative of the State Bank which seamlessly connects the Pakistani diaspora to the Pakistani financial system and economy. For the first time, it allows overseas Pakistanis to open a bank account in Pakistan in a completely digital manner, without needing to visit any bank branch or embassy.
The account enables overseas Pakistanis to undertake all kinds of banking transactions in Pakistan, including paying school and utility bills for their families, funds transfer, e-commerce, car financing through Roshan Apni Car and making charitable donations through Roshan Samaaji Khidmat. At the same time, the account provides exclusive investment opportunities in Naya Pakistan certificates offering attractive returns in both conventional and Shariah-compliant forms, as well as the Pakistani stock market and real estate.
The tax treatment is simple, freeing overseas Pakistanis from the need to file a tax return in Pakistan on income derived from investments through the account. Importantly, the account is fully repatriable, giving overseas Pakistanis the comfort of being able to remit the money in their accounts back to where they live without any difficulty.
Copyright Business Recorder, 2021
Recorder Report
04 Jul 2021
KARACHI: Roshan Digital Account (RDA) has fetched foreign inflows amounted to $1.5 billion during the nine months.
In line with SBP’s commitment to transparency in its key policy measures, SBP from Saturday has begun releasing regular data on the progress of Roshan Digital Account (RDA). Based on individual reports of banks that participate in RDA, the data has been consolidated and made available to the public through a new web page, which will be updated on a monthly basis. This periodic update was also requested by market participants.
Since its launch by the Prime Minister of Pakistan on 10th September 2020, Roshan Digital Account has attracted significant interest from overseas Pakistanis. According to the new web page released Saturday, 181,556 accounts have been opened from 171 countries across the world and $1.562 billion has been deposited in these accounts through end-June 2021.
The webpage shows monthly trends in the number of accounts opened, deposits, and investments in Naya Pakistan Certificates (NPCs) and the stock market. The data shows an accelerating trend across all these dimensions over the last few months. June 2021 saw the highest monthly number of deposits (USD 310 million) and NPC investments (USD 233 million) since the launch of Roshan Digital Account. As of end-June 2021, USD 1050 million has been invested in NPCs, with USD621 million in conventional NPCs and USD429 million in Islamic NPCs.
Roshan Digital Account is a landmark initiative of the State Bank which seamlessly connects the Pakistani diaspora to the Pakistani financial system and economy. For the first time, it allows overseas Pakistanis to open a bank account in Pakistan in a completely digital manner, without needing to visit any bank branch or embassy.
The account enables overseas Pakistanis to undertake all kinds of banking transactions in Pakistan, including paying school and utility bills for their families, funds transfer, e-commerce, car financing through Roshan Apni Car and making charitable donations through Roshan Samaaji Khidmat. At the same time, the account provides exclusive investment opportunities in Naya Pakistan certificates offering attractive returns in both conventional and Shariah-compliant forms, as well as the Pakistani stock market and real estate.
The tax treatment is simple, freeing overseas Pakistanis from the need to file a tax return in Pakistan on income derived from investments through the account. Importantly, the account is fully repatriable, giving overseas Pakistanis the comfort of being able to remit the money in their accounts back to where they live without any difficulty.
Copyright Business Recorder, 2021
ghazi52
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Housing finance: SBP to penalize banks for failing G-MSS targets
Ali Ahmed
06 Jul 2021
In order to enhance the level of disbursement for housing finance under the Government's Mark-up Subsidy Scheme (G-MSS), the State Bank of Pakistan (SBP) has decided to penalize banks falling short of their targets with effect from July 31, 2021.
The central bank in its circular on Tuesday said that banks are expected to make all-out efforts to harness the full potential of the scheme.
In April 2021, the SBP assigned monthly mandatory targets of the number of housing units and amount of disbursements (G-MSS targets) to banks in proportion to share in total banking assets.
“In view of foregoing, it has been decided that penalty will be imposed on banks falling short of their G-MSS targets w.e.f July 31, 2021, on both targets of the number of housing units and amount of disbursements,” read the circular.
SBP said that a baseline penalty will be charged on shortfall from cumulative targets till July 31, 2021, while a higher penalty will be charged on shortfall from targets of subsequent months.
This is the latest move by the central bank eyeing enhanced housing finance. Last month, the SBP asked banks to develop and deploy an income estimation model for the extension of low-cost housing finance to such applicants, in order to ease difficulties being faced by the general public in availing housing finance under G-MSS, commonly known as Mera Pakistan Mera Ghar.
Meanwhile, the SBP informed that the penalty charged on a bank will be adjusted after review of the bank’s efforts in terms of logins of applications, approvals of housing finance, results of SBP’s latest mystery shopping surveys, involvement of bank’s management, evidence of board information and support, sale, and marketing efforts, innovation in delivery channels, capacity building of staff and human resource (headcount) involved in G-MSS.
To assess efforts, State Bank will, if required, collect information from banks that fail to meet their targets.
Ali Ahmed
06 Jul 2021
In order to enhance the level of disbursement for housing finance under the Government's Mark-up Subsidy Scheme (G-MSS), the State Bank of Pakistan (SBP) has decided to penalize banks falling short of their targets with effect from July 31, 2021.
The central bank in its circular on Tuesday said that banks are expected to make all-out efforts to harness the full potential of the scheme.
In April 2021, the SBP assigned monthly mandatory targets of the number of housing units and amount of disbursements (G-MSS targets) to banks in proportion to share in total banking assets.
“In view of foregoing, it has been decided that penalty will be imposed on banks falling short of their G-MSS targets w.e.f July 31, 2021, on both targets of the number of housing units and amount of disbursements,” read the circular.
SBP said that a baseline penalty will be charged on shortfall from cumulative targets till July 31, 2021, while a higher penalty will be charged on shortfall from targets of subsequent months.
This is the latest move by the central bank eyeing enhanced housing finance. Last month, the SBP asked banks to develop and deploy an income estimation model for the extension of low-cost housing finance to such applicants, in order to ease difficulties being faced by the general public in availing housing finance under G-MSS, commonly known as Mera Pakistan Mera Ghar.
Meanwhile, the SBP informed that the penalty charged on a bank will be adjusted after review of the bank’s efforts in terms of logins of applications, approvals of housing finance, results of SBP’s latest mystery shopping surveys, involvement of bank’s management, evidence of board information and support, sale, and marketing efforts, innovation in delivery channels, capacity building of staff and human resource (headcount) involved in G-MSS.
To assess efforts, State Bank will, if required, collect information from banks that fail to meet their targets.
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