Banking & Finance Stay updated with Business News, Pakistan news, Current world news and latest world news with Business Recorder.. Tue, 27 Jan 2015 01:05:22 +0000 SRA Framework 2.0 en-gb SBP Governor asks banks to ensure operational efficiency imageKARACHI: Governor State Bank of Pakistan (SBP) Ashraf Mahmood Wathra has stressed upon the banks to focus on private sector lending and deposit mobilisation.

In this context he said that the average spread of all banks continues to remain high and should be reasonably rationalised.

"SBP shall review the position by the end of June 2015 and may take regulatory measures to lower the spread," he said while addressing a meeting of Presidents/CEOs of all commercial Banks and DFIs here on Monday.

The Governor took stock of operational activities and performance and issued important directives to enhance the efficiency of banks.

Discussing the condition of Islamic banks and their profitability, the Governor highlighted that Islamic banks should reward their customers appropriately in line with their surging profits. "Banks were advised to come up with their own solutions or the SBP will apply Shariah compliant measures to address the issue," he instructed.

Ashraf Wathra asked the banks to improve their foreign exchange related services for the small customers. "The staff needs to be appropriately trained, and products developed to assist public in the easy execution of their genuine foreign exchange transactions such as fees or medical expenses," he observed.

He advised that all possible measures should be taken at institutional level to improve the quality of services.

He said that SBP will also review its foreign exchange circulars to facilitate the banks in this regard.

Urging the banks to realise the efforts required for maintaining foreign exchange reserves, the Governor emphasised that banks should discourage import of non-essential items by reviewing their internal credit policies. On the other hand, he directed the banks to facilitate the exporters to the maximum to promote growth in exports and thus the economy. He was also critical of the banks for inefficiencies of their overseas offices.

"SBP has been receiving requests from different banks to have their representation overseas but on the contrary, performance of existing representative offices is not productive. Therefore, instead of having overseas offices, banks should perhaps consider subsidiaries in foreign markets as "exchange companies" which may further help home remittances as well," he elaborated.

Talking about the IT security management, the Governor SBP stated that banks must strengthen their back up support and improve security measures. He also pointed out towards the need to improve capacity of bank staff to upscale their service standards and run banking operations. He offered that banks could be facilitated by the National Institute of Banking and Finance (NIBAF) and Institute of Bankers (IBP) to train the human resources at different levels.

The Governor added that branchless banking agents also need to be trained.

He advised the banks to improve the functioning of their ATMs as unavailability of ATM services is akin to going to a bank branch counter which doesn't have cash. The banks were advised to ensure round the clock services of their ATMs for the public.

Wathra took strong notice of the incidence of banking frauds with the involvement of bank staff. He said that banks cannot exonerate themselves from such incidence and must take strict measures to eliminate such frauds. "The banks are responsible for their staff and signatories who authorise transactions," he said.

The Governor also encouraged the banks' CEO/Presidents to actively participate in programmes of public interest on the invitation of SBP.

Earlier, before the Governor's address, Muhammad Ali Malik, Director Domestic Money Market Department stated the conditions of financial markets and external sector whereas Shoukat Zaman, Director Banking Policy and Regulation Department briefly discussed non- essential imports. Abid Qamar, Chief Spokesman, highlighted the facts about private sector credit. Further, Executive Director, Samar Husnain presented developments in relation to export finance scheme and long term financing facility of the SBP.

Copyright APP (Associated Press of Pakistan), 2015

]]> (Shoaib-ur-Rehman Siddiqui) Banking & Finance Mon, 26 Jan 2015 21:01:22 +0000
SBP injects Rs459.150bn into market imageKARACHI: State Bank of Pakistan (SBP on Friday injected Rs. 459.150 billion into market for seven days through its open market operation (OMO).

The bids offered for this injection were of Rs. 496.950 billion.

The rate of return accepted is 9.3 per cent per annum, said SBP statement.

Copyright APP (Associated Press of Pakistan), 2015

]]> (Shoaib-ur-Rehman Siddiqui) Banking & Finance Fri, 23 Jan 2015 17:27:52 +0000
Pak forex stands at $ 15.01908bn$-1501908bn.html$-1501908bn.html imageKARACHI: Total liquid foreign reserves of the country stand at dollars 15.01908 billion, said State Bank of Pakistan's (SBP) weekly statement issued here on Thursday.

The statement said that the foreign reserves held by State Bank on January 16 amounted to dollars 10.33005 billion and the net foreign reserves held by other banks stood at dollars 4.68903 billion.

During the week ending on January 16, SBP's liquid foreign exchange reserves decreased by dollars 34 million to $ 10.331 billion compared to $ 10.365 billion of the previous week.

Over the period, SBP made payments of $ 57 billion on account of external debt servicing and other official payments. No major inflow was recorded during the week under consideration.

Copyright APP (Associated Press of Pakistan), 2015

]]> (Imaduddin) Banking & Finance Thu, 22 Jan 2015 14:15:27 +0000
Banks disburse Rs 219.5bn agri loan in 6 months: SBP imageKARACHI: During the first half of current fiscal year (July-Dec. 2014) the banks have disbursed agricultural credit of Rs 219.5 billion which is 44% of the overall annual target of Rs 500 billion.

This is 38% higher than disbursement of Rs 159.4 billion made during the corresponding period of last year. The outstanding portfolio of agricultural loans has increased by Rs 34.7 billion from Rs 276.7 billion to Rs 311.4 billion at the end December 2014 compared to same period of last year, said SBP statement here on Wednesday.

Amongst the major banks, Muslim Commercial Bank has achieved 64.3% of its annual target, United Bank Limited achieved 55.2%, Habib Bank Limited 51%, Allied Bank Limited 37.6% while National Bank of Pakistan could achieve only 34.6% of its individual annual target. Under the specialized banks category, Zaree Tarqiati Bank Limited disbursed Rs 27.8 billion or 30.9 % against its target of Rs 90.0 billion while PPCBL disbursed Rs 4.2 billion i.e. 36.6 % against its target of Rs 11.5 billion during the period under review.

Within fifteen domestic private banks, Bank of Khyber has achieved 72.4%,Faysal Bank achieved 57.3%, Bank Alfalah 51%, Summit Bank 44.8%, NIB Bank 42.7%, Bank AL Habib 38%, Silkbank 36.7 %, Soneri Bank 33.4%, Askari Bank 30%, Bank of Punjab 29.5% while Sindh Bank could achieve only 27.9% of their annual targets during Jul-Dec. 2014. However, Standard Chartered Bank has disbursed Rs 3.7 billion against its annual target of Rs 2.5 billion for 2014-15. Under microfinance category, seven microfinance banks as one group have disbursed Rs 13.8 billion against their annual target of Rs 28.2 billion while under Islamic mode of financing, four Islamic banks collectively disbursed Rs 0.9 billion against their targets of Rs 2.3 billion to agricultural borrowers.

Copyright APP (Associated Press of Pakistan), 2015

]]> (Imaduddin) Banking & Finance Wed, 21 Jan 2015 15:21:43 +0000
SBP Governor's press conference on monetary policy imageKARACHI: Governor, State Bank of Pakistan (SBP) Ashraf Mahmood Wathra will announce monetary policy decision at a press conference here on Saturday.

The press conference is scheduled to start by 4.30 PM at SBP Head Office, said SBP announcement here on Wednesday.

Copyright APP (Associated Press of Pakistan), 2015

]]> (Imaduddin) Banking & Finance Wed, 21 Jan 2015 14:57:07 +0000
SBP auctions Rs 156.505045bn MTBs imageKARACHI: State Bank of Pakistan (SBP) on Wednesday auctioned Government of Pakistan market treasury bills (MTBs) amounting Rs 156.505045 billion; with face value of Rs 168.40301 billion.

The bids offered for 3-months, 6-months and 12-months MTBs were of Rs 506.4100683 billion ; having face value of Rs 546.26703 billion, said SBP statement.

Copyright APP (Associated Press of Pakistan), 2015

]]> (Imaduddin) Banking & Finance Wed, 21 Jan 2015 14:55:11 +0000
SBP to issue Rs 20 commemorative coin imageKARACHI: State Bank of Pakistan (SBP) will issue Rs 20 commemorative coin from January 31, 2015 to mark 'Pakistan-China Year of Friendly Exchange 2015.' This is in pursuance of Federal Government's notification dated January 8, 2015, said SBP statement here on Wednesday.

The coin weighs 10 grams with 75% copper and 25% nickel.Its shape is round with serration on the edge and a diameter of 27.5mm.The waxing crescent moon and a five pointed star facing north-west in rising position are in the centre of the obverse face of the coin. Along with periphery on the top of the crescent star the wording 'Islami Jamhuria Pakistan' in Urdu script is inscribed.

Below the crescent and at the top of two springs of wheat with arms curved upward, there is the year of issuance 2015.

The face value of the coin in numeral and quot; 20 & quot; in bold letters and 'Rupia' in Urdu script are written on the right and left sides of crescent star respectively.

There are national flags of Islamic Republic of Pakistan and People Republic of China in the centre of reverse side of the coin.

Pakistani flag is shown at right side of the coin whereas Chinese flag at the left side. The wording 'Year of Friendly Exchange 2015' is inscribed above these two flags and along with the periphery of the coin.

Copyright APP (Associated Press of Pakistan), 2015

]]> (Imaduddin) Banking & Finance Wed, 21 Jan 2015 14:53:49 +0000
CDNS saves Rs.201bn in July-January 2014-15 imageISLAMABAD: The Central Directorate of National Savings (CDNS) realised Rs.201 billion as savings during the first seven months of this fiscal year against the target of Rs.153bn.

The amount was Rs.98 bln more than the collection during the same period of last year, a senior official of CDNS told APP on Thursday.

He said the assets of CDNS have also crossed Rs2.6 trillion, 26 per cent of the total national savings.

He said the CDNA to initiate the collaboration with National Institute of Finance and Technology (NIFT) to provide facility to customers for clearance of cross checks in National Bank of Pakistan (NBP).

Similarly, new rates for special saving certificates (SSC) would be 9.87pc, regular income certificates (RIC) 10.15pc, behbood certificates/pensioners accounts (BSC) 12.72pc and defence saving certificates (for 10 years) 11.08 percent a year.

"The performance of National Savings has improved, particularly during past couple of years as its investments have recorded tremendous growth," the official said.

The government,he said, has taken about 27 percent of its non-inflationary loans from the CDNS to meet its development and budget expenditures.

The CDNS has also introduced different savings schemes to generate revenue through national savings.

Answering a question, he said the project of linking all the 371 National Savings Centres through online system would be completed in three to four years.

The PC-1 of the project had been approved by the government and work was in progress, he added.

Copyright APP (Associated Press of Pakistan), 2015

]]> (Imaduddin) Banking & Finance Thu, 15 Jan 2015 13:50:15 +0000
Liquidity management aims at price stability: SBP imageKARACHI: Liquidity management operations of State Bank of Pakistan (SBP) aim to achieve monetary policy objectives of price stability so as to provide a facilitating environment for economic growth.

In particular, the intermediate goal is to contain the overall monetary expansion (M2 growth) within safe limits; consistent with price stability objective, said SBP statement here on Tuesday.

This is ensured by management of day-to-day liquidity in the banking system with a view to keep the overnight money market repo rate within the interest rate corridor specified by SBP Repo and Reverse Repo rates. This requires liquidity injections or mop ups at appropriate periods in time.

In recent times, the liquidity injections by the SBP have increased considerably relative to its past trends. Noticing these unusual changes, various market analysts perceive the SBP liquidity management to be favoring the banks in making profit or supporting the government to meet its borrowing needs.

These perceptions are based on misconceptions and partial analysis of monetary variables. The SBP considers it important to address these misconceptions to avoid misguided conclusions and expectations on the basis of such analysis.

While assessing the liquidity conditions and analyzing the open market operations, it is important to keep in view the overall growth of money supply in the system and its composition.

Liquidity injections are considered counterproductive only when given the inflationary outlook and monetary policy stance, they are contributing towards excessive monetary expansion. Further, a lopsided contribution in growth in money supply complicates monetary management. For instance, despite a contraction in net foreign assets, high monetary growth led by government borrowing reflects external as well as fiscal imbalances, which had been the case during last few years.

From the recent monetary aggregates data it can be observed that the overall monetary expansion (M2 growth) is not excessive; in fact it has decelerated compared to past few years. More importantly, the composition of money supply is reflecting the positive changes occurring in the real economy. For instance, the growth in M2 is being contributed significantly by an expansion in net foreign assets of SBP owing to improvement in external sector. Moreover, the growth in private sector credit, albeit lower than last year, has a reasonable contribution in monetary expansion. Moreover, the improved fiscal discipline has resulted in lower government borrowing from the banking system and changed its composition between the commercial banks and SBP considerably.

The government has in fact been retiring its borrowings from SBP. As a result, the liquidity shortage in the system has increased considerably. To meet this, the SBP has been injecting liquidity, through its open market operations, consistent with its monetary policy stance. If the SBP refrains from injecting liquidity in the system, it could retard broad money growth leading to stifling of economic activities and thus a recovery in growth.Hence the quantum and frequency of liquidity injections through OMOs of SBP, even when they seem excessive in isolation, are in fact necessary to keep money supply consistent with keeping inflation low aand provide support to growth.

Copyright APP (Associated Press of Pakistan), 2015

]]> (Imaduddin) Banking & Finance Tue, 13 Jan 2015 15:22:44 +0000
Workers' remittances rise over 15pc to $9 billion in the first half of FY15$9-billion-in-the-first-half-of-fy15.html$9-billion-in-the-first-half-of-fy15.html imageISLAMABAD: Overseas Pakistani workers remitted $8,981.67 million in first half (July to December) of FY15, showing an impressive growth of 15.26 percent compared with $7,792.40 million received during the same period of FY14.

During December 2014, the inflow of worker's remittances amounted to $1,583.23 million, which is 20% higher than November 2014 and 14.32% higher than December 2013, says a statement issued by the State Bank of Pakistan on Monday.

According to SBP, the country wise details for the month of December 2014 shows that inflows from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to $499.08 million, $352.37million, $222.45 million, $188.34 million, $189.22 million and $30.34 million respectively compared with the inflow of $410.03 million, $275.16 million, $223.99 million, $177.11 million, $165.05 million and $37.43 million respectively in December 2013.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during December 2014 amounted to $101.43 million together as against $96.17 million received in December 2013.

Copyright APP (Associated Press of Pakistan), 2015

]]> (Imaduddin) Banking & Finance Mon, 12 Jan 2015 16:42:50 +0000