1. Please refer to our BSD Circular No. 16 dated 10th August, 2002 on the captioned subject whereby banks/DFIs are required to maintain cash reserves in US$ equivalent to not less than 20% of their total FE-25 deposits on daily basis with State Bank of Pakistan in the following manner:

a) 5% Cash Reserve Account (US$)
b) 15% Special Cash Reserve Account (US$).

2. It has been decided to reduce the Special Cash Reserve requirement from 15% to 5% of total FE-25 deposits with immediate effect. Accordingly the banks/DFIs will henceforth be required to maintain Cash Reserve in US$ equivalent of their total FE-25 deposits on daily basis with SBP in the following manner:

a) 5% Cash Reserve Account (US$)
b) 5% Special Cash Reserve Account (US$).

3. This new Special Cash Reserve requirement is being changed temporarily to provide liquidity comfort to banks and the same will be reviewed by February 2008.

4. All the other instructions on the subject shall remain unchanged

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