All
Banks/NBFIs
Dear
Sir,
PRUDENTIAL
REGULATION-XXVIII FOREIGN
CURRENCY DEPOSITS UNDER FE 25-1998
Please
refer to para “f” of BSD Circular No.21 dated 14th
May, 2001 on the captioned subject.
2.
While our stated direction for banks is to grow the
local currency deposits and contain the FE-25 foreign currency
deposits, the 11 September 2001 event and its implications
on global and local financial markets have prompted us to
introduce some flexibility to and widen the scope of the FE-25
Scheme and the relevant Prudential Regulation. It has, therefore,
been decided that while computing the 20% cap on FE-25 deposits
against local currency deposits, the foreign currency deposits
mobilized under FE-25 and utilized for financing of trade
related activities will be netted-off.
Therefore, the clause “f” of Prudential Regulation
No. XXVIII has
been amended which may now be read as:
“Foreign
currency deposits mobilized under FE-25 schemes after netting-off
the deposits utilized to finance trade related activities
such as financing against Import and Export documents, should
not at any point exceed twenty percent of the local currency
deposits of the banks / NBFIs at the close of business on
the last working day of the preceding quarter.”
3.
The banks/NBFIs who will still be in breach of this
new requirement as on 1st January 2002 shall ensure
compliance by 1st July, 2002.
4.
Effective 5th January, 2002 all banks will
report the equivalent Pak rupee amount (with a foot note on
$ equivalent) of FE-25 deposits utilized for trade related
activities under newly created code No. 80-05 of their Weekly
Statement of Position submitted to this department.
5.
Other instructions on the subject shall, however, remain
unchanged.
6.
Please acknowledge receipt.
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