All
Authorised Dealers
in
Foreign Exchange
Dear
Sirs,
Foreign
Currency Deposits Under FE-31 Scheme (Incremental Deposits)
Attention of
the Authorised Dealers is invited to FE Circular No.31 of
1998, in terms of which banks are required to surrender
to SBP their deposits mobilized under FE-31 and rupee equivalent
of the foreign currency surrendered is paid by the State
Bank to the banks and forward cover is provided by the State
Bank on tap basis at the option of the Authorised Dealers.
2. With a view
to further liberalize the forex market the following has
been decided in respect of FE-31 deposits:
(a) With effect
from April 01, 2002, Authorised Dealers would not be required
to surrender to SBP the foreign currency deposits mobilized
by them.
(b) With effect
from April 01, 2002, no fresh forward cover will be provided
by the SBP.
(c) No rollover
of forward cover will be allowed with effect from April
01, 2002.
(d) Authorised
Dealers will be allowed to take up their forward covers
both for deposits and to the extent of accrued interest
from SBP by paying equivalent Pak Rupee at booked rates.
Premature take up would also be permissible.
(e) Upto June
30, 2002, CRR and SLR on FE-31 deposits will remain applicable
as per existing procedure.
(f) With effect
from July 01, 2002, the same CRR and SLR will be applicable
on FE-31 as is applicable to FE-25.
(g) As regards
reporting requirement, effective 6th July, 2002 (reporting
date), the amount of FE-25 deposits reported under Code
80-03(i) & Code 80-03(ii) of Weekly Statement of Position
(WSP) being submitted to Banking Supervision Department
should also include the amount of FE-31 deposits. During
the transitory period from July to December 2002, the banks
should clearly specify at the foot of the same page of WSP
(by way of an asteric), the bifurcation of amounts reported
under code 80-03(i & ii) into FE-25 and FE-31 deposits.
Effective Ist January 2003, FE-31 deposits would form an
integral part of FE-25 deposits, hence all deposits under
FE-31 shall cease to exist and will be shifted to F.E-25
for which the Authorised Dealers would develop their own
arrangement/mechanism.
You are requested
to bring the above to the notice of all the constituents.
