Please refer to BSD Circulars No. 21 of October 8, 2008 and No. 10 dated May 22, 2008 on the captioned subject.

2. In exercise of the powers conferred upon the State Bank of Pakistan under Section 36 of the State Bank of Pakistan Act, 1956, and Section 29 of the Banking Companies Ordinance, 1962 it has been decided to reduce the Cash Reserve Requirement (CRR) and Statutory Liquidity Requirement (SLR) as under:-

A- Cash Reserve Requirement:

a. Effective from 18th October, 2008:

i) Weekly average of 6.0% (subject to daily minimum of 5.0%) of total Demand Liabilities (including Time Deposits with tenor of less than 1 year)

ii) Time Liabilities (including Time Deposits with tenor of 1 year and above) will not require any Cash Reserve.

b. Effective from 15th November 2008: In line with earlier BSD Circular No. 21 of October 8, 2008, it is reiterated that the CRR will be further reduced as under:

i) Weekly average of 5.0% (subject to daily minimum of 4.0%) of total Demand Liabilities (including Time Deposits with tenor of less than 1 year)

ii) Time Liabilities (including Time Deposits with tenor of 1 year and above) will not require any Cash Reserve.

B- Statutory Liquidity Requirement:
Effective from 18th October 2008:

i) 19% (excluding CRR) of Total Demand Liabilities including Time Deposits with tenor of less than 1 year).

ii) Time Liabilities (including Time Deposits with tenor of 1 year and above) will not require any SLR

3. All other instructions on the subject shall, however, remain unchanged.

Please acknowledge receipt.