LIQUIDITY REQUIREMENT (SLR) -DFIs
terms of Section 29 of the Banking Companies Ordinance,
1962 (BCO), every banking company and financial institution
specified in Section 3A are required to maintain Statutory
Liquidity Requirement (SLR) in cash, gold or unencumbered
approved securities valued at a price not exceeding “the
lower of the cost or the current market price” an
amount which shall not at the close of business on any day
be less than “such percentage” of the total
of its Time and Demand Liabilities (TDL) in Pakistan, as
may be notified by the State Bank from time to time.
In exercise of the powers vested upon the State Bank of
Pakistan under the above provision of law, it has been decided
that henceforth all the Development Financial Institutions
shall maintain SLR @15% of their Total Time & Demand
Liabilities in the form of liquid assets (excluding Cash
Reserve maintained @1% of their TDL) as enumerated under
Section 29 of the BCO. Moreover, they will continue to maintain
Cash Reserve (CRR) with State Bank of Pakistan @ 1% of their
Demand & Time Liabilities.
The Total Time and Demand Liabilities (TDL) for the purpose
of SLR and CRR shall be determined by excluding the following
i) Total Equity including Paid-up Capital, Reserves and
un-appropriated profit/ (Loss)
ii) Borrowings from Banks and DFIs
iii) Borrowings from State Bank of Pakistan
iv) Deposits from Banks and DFIs
liabilities, except those specifically listed above, shall
be included in TDL of DFIs for the purpose of computing
SLR and CRR.
Furthermore, Liquid Assets in terms of section 29 of the
BCO shall include cash in hand, gold and Un-encumbered Approved
Securities. A list of eligible securities for maintaining
SLR is included as Annexure A.
DFIs are required to report the amount of Unencumbered Approved
Securities (eligible for the purpose of SLR in terms of
Section 5(a)(ii) of the BCO) alongwith its break up in their
weekly statement of liquidity.
5) PIBs are eligible approved security for SLR purposes
only to the extent of 5% of the Total Demand & Time
Liabilities (TDL). However, keeping in view their current
investment in PIBs, DFIs are allowed to report total investment
in PIBs (held in their own account) as an approved security
eligible for SLR upto December 31, 2005.
All the DFIs are required to furnish to the State Bank a
weekly Statement of Liquidity Position as per Annexure-B
(to be called as Statement No.2), showing the details of
the liquid assets and liabilities in terms of the
provision contained in Section 29 of the BCO. Penalty on
account of shortfall in SLR, if any, will be levied on the
basis of this statement, on weekly basis.
Rate of penalty in case of default in maintenance of SLR
is Rupees 86 per Rupees hundred thousand or part thereof
For SLR purpose, TDL would be calculated on weekly basis
which will be applicable from the date of the weekend i.e.
Saturday to a day before next weekend. Further, DFIs are
required to maintain prescribed level of SLR at the close
of business on daily basis.
9) The above instructions shall supersede the existing NBFIs
Rule 6 on the subject, and shall come into force w.e.f 1st
January, 2005. All DFIs shall henceforth report their SLR
as per Statement No.2 (Annexure B) and shall regularize
their position in accordance with these instructions before
expiry of this transitory period i.e. by 31st December,