In
order to further liberalize foreign exchange regime it has
been decided to allow banks / NBFIs to freely
utilize Foreign Currency Deposits mobilized under F.E. 25
for lending / investment /placement in Pakistan and /or abroad
with effect from 2nd April 2001. Such deposits if maintained
abroad will not count towards banks’ Nostro Limits. As a sequel
to this, restrictions imposed by our Exchange Policy Department
vide their FE circular No 13 of 1999 stand withdrawn
to this extent.
2.
Accordingly
the State Bank, in exercise of the powers conferred on
it under Section 36(1) of the SBP Act 1956, has
further decided that effective 2nd April 2001, every bank /
NBFI shall be required to maintain cash reserves in US$ equivalent
to not less than 25% of their total FE 25 deposits on
daily basis with State Bank in the following manner: -
a)
5% Cash Reserve Account (US $)
b)
20% Special Cash Reserve Account
(US $)
3.
The reserves shall be kept in two separate accounts opened and
maintained at the concerned office of the State Bank. While
the cash reserve account will be non-remunerative, special cash
reserve account will be remunerated by State Bank on daily product
basis on rates notified by our Exchange & Debt Management
Department at the end of each month. The rates so announced
shall be effective for the following month. The banks / NBFIs
may approach our Accounts Department for opening of the said
accounts.
4. For the purpose of determining of reserve requirements,
all deposits mobilized under FE 25 in foreign currencies other
than US$, will be converted in US$ at the closing rates of exchange
prevailing on the first day of each month of the respective
banks / NBFIs. For any subsequent deposits, the prevailing exchange
rates on the date of such deposits will apply.
5. Banks / NBFIs will commence reporting of the position
of reserves so maintained in their respective weekly statement
of position / statement of affairs falling due from the week
ending April 7, 2001. The cash reserve held by banks
shall be reported by them in the weekly statement of position
under the head “Balance with State Bank of Pakistan” under Code
12.01. Separately in the notes to the weekly statement of position,
banks will report foreign currency deposits held by them under
F.E. 25 of 1998 under a new sub-code # 80.03 as under: -
Code
80.03 (i) Deposits held under F.E. 25 ( in equivalent
Pak Rupees )
Code
80.03 (ii) Deposits held under F.E. 25 ( in equivalent
US$ )
6. Similarly
NBFIs will report the position of their F.E. 25 deposits as
a footnote to their “Weekly statement of Affairs” as per following
nomenclature: -
Deposits
held under F.E. 25 of 1998 (in equivalent Pak Rupees)
Deposits
held under F.E. 25 of 1998 (in equivalent US$)
NBFIs
will also separately indicate the balance held by them under
each of the Cash reserve accounts so maintained with SBP in
the notes to their “Weekly Statement of Affairs”. Accordingly
a revised weekly statement No.2 viz. “statement showing liquidity
position” is enclosed. 7. Banks
/ NBFIs failing to meet the reserve requirements against F.E.
25 deposits, as prescribed above, shall be liable to levy
of fines at scales prescribed under Prudential Regulations
No.XXV.
Please acknowledge receipt.
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