SBP changes rules governing Primary Dealer System, SLR
- The SBP said that it has been decided to withdraw holding limits specified in the above circular on existing as well as new issues.
- Accordingly, PDs and Non-PDs may hold a particular issue of a long term paper without any holding limit restriction.
The State Bank of Pakistan (SBP) on Thursday, issued a number of changes in its rules governing primary dealer system, ijara sukuk and Statutory Liquidity Requirements.
The central bank referring to the DMMD Circular no. 26 dated November 15, 2019 in which holding limits have been specified for Primary Dealers(PDs) and Non-PDs for a particular issue with days to maturity greater than 1-year.
The SBP said that it has been decided to withdraw holding limits specified in the above circular on existing as well as new issues. Accordingly, PDs and Non-PDs may hold a particular issue of a long term paper without any holding limit restriction.
Whereas, referring to DMMD Circular No. 17 of 2020 in which holding limits of GOP Ijara Sukuk have been defined for banks.
In this regard, the central bank has decided that the holding limits specified in the above circular shall not be applicable henceforth on all existing as well as new issues. Accordingly, GOP Ijara Sukuk may be held without any restriction of holding limit.
Furthermore, in terms of which Banks and Development Finance Institutions (DFIs) holding of PIBs (fixed rate) are counted towards maintenance of Statutory Liquidity Requirements (SLR) up to 15 percent and 5pc of their liabilities (subject to SLR) respectively.
The SBP announced that it has been decided to withdraw aforesaid limits applicable on PIBs for SLR purpose. Accordingly, henceforth holdings of PIBs by banks and DFIs shall be fully counted towards maintenance of SLR.
The SBP said that the instructions will be effective immediately.
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