Progress on Measures by State Bank of Pakistan

 

OTHER MEASURES
Ensuring the Availability and Continuity of Financial Services (Updated on Dec 31, 2020) 

SBP is continuously engaged with the industry to understand issues and challenges and formulate a policy response accordingly. In this vein, SBP conducted a flash survey covering all banks, Development Financial Institutions (DFIs) and Micro Finance Banks (MFBs). The survey results show that the industry has started to take preventive measures to limit the adverse repercussions of COVID-19. However, the results also indicate diversity among the industry participants in terms of their readiness to handle any worst-case scenario.

Banks/DFIs/MFBs were advised to adopt the following measures to help fight the spread of COVID-19 to ensure availability of uninterrupted financial services:

  1. Create awareness amongst the banks/DFIs/MFBs' staff and customers regarding COVID-19;

  2. Implement the guidelines issued by the World Health Organization, the Government of Pakistan and the Provincial Governments, in letter and spirit, to ensure the safety and health of employees and cleanliness at the workplace;

  3. Take precautionary measures such as enhanced usage of cash counting machines, encouraging customers to use Alternate Delivery Channels (ADCs) etc. to reduce contact with currency notes and other financial instruments. Further, make elaborative arrangements to provide uninterrupted financial services through ADCs (e.g. ATMs, online banking, transactions through call centers etc.);

  4. Reassess Business Continuity Plans (BCPs) in the existing situation and develop suitable remedial plans, including allocation of human and other resources, for their effective implementation;

  5. Carry out an impact analysis to assess the consequences on business and operations and enhance the monitoring frequency of key risk areas like credit, capital market and foreign exchange exposures; and

  6. Reach out to the key payment and settlement system partners such as NIFT, 1Link, NCCPL and CDC to ensure continued availability of their services.

In order to implement the above instructions and take other necessary measures, banks/DFIs/MFBs' have been advised to form a senior level committee to ensure that the responses towards risks arising out of COIVID-19 are robust and adequate.

Circular:
http://www.sbp.org.pk/bprd/2020/CL6.htm

Continuous availability of ATMs

will be ensured by keeping them up and running 24/7 by the banks. Banks' call centers and helplines must also be operative 24/7 and timely resolution of the complaints shall be ensured.

Critical functions and systems of banking to remain available

All critical functions and systems required to provide banking services, including Real Time Gross Settlement System (RTGS) will remain available as usual even during the lock downs. Large scale closure of branches may cause rush and congestion in the operative branches, which may be counterproductive to efforts to contain the spread of the disease. The banks may, however, close branches where staff is infected and for which requisite human resource is not available. The situation will be reviewed again in couple of days based on the customers' visit to branches during lock downs.

Minimal staff at banks

SBP, from Mar 24, 2020, has invoked a scenario wherein minimal staff will be present at its premises to undertake critical functions, whereas the rest of the staff has been allowed to work from home. The Banks can also make such arrangements both in their branches and Head/Regional offices. Further, the banks may start their branch operations from 10 a.m. if needed to better facilitate their clients.

Circulars:
http://www.sbp.org.pk/bprd/2020/CL8.htm
http://www.sbp.org.pk/bprd/2020/CL16.htm
http://www.sbp.org.pk/bprd/2020/CL17.htm
http://www.sbp.org.pk/bprd/2020/CL18.htm
http://www.sbp.org.pk/bprd/2020/CL24.htm
http://www.sbp.org.pk/bprd/2020/CL32.htm
http://www.sbp.org.pk/bprd/2020/CL33.htm

NADRA Verisys in place of Biometric Verification (BMV)

On December 31, 2020, SBP extended the validity of utilizing NADRA Verisys in place of Biometric Verification (BMV) along with other measures for verification purpose until June 30, 2021. Earlier, the deadline was December 31, 2020. However, after the lapse of this timeline, MFBs shall resume biometric verification with revised timelines of July 31, 2021 and September 30, 2021 for customers assigned medium and normal priorities, respectively. MFBs were encouraged to introduce electronic account opening forms/ other forms along with electronically acquiring and keeping on record information required under AML/ CFT Regulations for MFBs.


Circulars:
http://www.sbp.org.pk/acd/2020/CL3.htm
http://www.sbp.org.pk/acd/2020/CL6.htm
http://www.sbp.org.pk/acd/2020/CL32.htm
http://www.sbp.org.pk/acd/2020/CL52.htm

Clearing of cheques made easier and faster

In a bid to limit person-to-person interactions and to provide ease of services to the customers, in the backdrop of COVID-19, Banks and MFBs are allowed to provide Direct Cheque Deposit Facility under which a crossed cheque may be presented by payee/beneficiary directly into paying/drawee bank, instead of their bank branches as per existing practice. In this way funds may be transferred by the paying/drawee bank either through RTGS of Interbank fund transfer functionality. Moreover, Banks/MFBs may also make arrangements to collect cheque from registered addresses of their customers upon their request or customers may drop their cheques in drop boxes of their Banks, installed in selected branches.

In case of complete lock down, Corporates/Priority customers of banks may send the scanned image of their cheque along with relevant details of the beneficiary either through registered emails or through mobile applications of their banks to push funds from their accounts to the payee bank. However, banks are encouraged to implement additional risk mitigation measures as per their internal policies while offering these services to their customers. Banks/MFBs may also make arrangements with the Clearing House (NIFT) for clearing their cheques through Image Based Clearing (IBC) functionality as per the agreed SOPs between NIFT and banks.


Circular:
http://www.sbp.org.pk/psd/2020/C4.htm

Banks to adopt more robust cybersecurity measures

Only authorized users of financial institutions will access internal IT resources. They will also ensure that heir cybersecurity policies cater to risks of spying, interception, and modification.Banks have also been tasked to establish dedicated Cyber Threat Intelligence Units (CTI-U) and Emergency Response Teams (ERTs) to minimize and control the damage resulting from cybersecurity incidents. They will also exercise caution in handling emails with suspicious/work-related subject line, attachment, or hyperlink especially those related to recent phenomenon related to COVID-19.

Circular:
http://www.sbp.org.pk/psd/2020/C3.htm

Availability of helpline & warning against fraudsters calling for personal information

We have taken additional measures to facilitate bank customers that are faced with extraordinary challenges amid COVID-19 situation. They can now approach SBP Helpline at 021-111-727-273 if their queries or complaints are not being responded by banks.

We have also advised the banks to protect their employees and customers and ensure work place safety by implementing guidelines of World Health Organization, Government of Pakistan and the Provincial Governments in letter and spirit. In case bank employees and customers still face difficulties or have concerns over safety arrangements, they may bring this to our notice by emailing at [email protected]

Furthermore, public is advised not to disclose any personal or account information about their bank accounts or credit/debit cards on incoming calls or messages by fraudsters citing situation under COVID-19. Details of such calls or messages may be reported to SBP Helpline at 021-111-727-273 or emailed at [email protected]


For details:
http://www.sbp.org.pk/press/2020/Pr-06-Apr-20.pdf

Promoting Digital Payments (Updated on Mar 28, 2020) 
Waiving charges for online fund transfers

SBP, in order to facilitate transactions through digital means, has waived all the transactional fees charged by banks against all the inter-bank and intra-bank fund transfers levied by banks through online banking channels. In addition to waiving charges on fund transfers through online banking channels, SBP lead by example and also waived charges against all customer transfers performed through SBP operated RTGS system.

Further, to enable easy on-boarding of customers to use online banking channels, SBP waived the requirement of biometric verification to activate internet and mobile banking as per PSD Circular No.09 of 2018, till further instructions, with the instructions to ensure:

  1. Customer authentication and verification using appropriate measures
  2. Safety and security of customer transactions.
SBP also advised banks/MFBs/PSOs/PSPs to make arrangements on urgent basis to:
  1. Enable digital collection of all challans/invoice based payments such as education fee.
  2. Offer loan repayments facility through online/digital channels.

Circular:
https://www.sbp.org.pk/psd/2020/C2.htm

Facilitation regarding paper-based clearing operations

During the pandemic, the banking industry faced immense pressure to facilitate the financial needs of the customers due to decrease in operational timings and subsequent closure of some of the branches. These steps decreased the number of paper based instruments processing and also increased processing times. In order to provide relief, SBP introduced Direct Cheque Deposit Facility, which has reengineered the whole process of clearing of cheques.

The facility not only decreased the processing turnaround time but also provided an opportunity to the customers to avail fund transfer facility through SBP operated RTGS. In this facility, the customers instead of going to their account maintaining branch, can present their crossed-cheques to any branch of the paying bank, in order to have immediate transfers of funds to their account. Through these sets of instructions, SBP also allowed banks to provide following services to their customers with the intention of processing paper based instruments without going to branches:

  1. Doorstep Cheque Collection Facility
  2. Drop box Cheque Collection Facility
  3. Clearing of scanned image of cheque for priority/corporate customers
  4. Image Based Clearing (IBC) functionality

Circular:
https://www.sbp.org.pk/psd/2020/C4.htm

Relaxing Credit Requirements for Exporters and Importers (Updated on Aug 20, 2020) 
SBP extends time for settlement of foreign currency loans

On Aug 20, 2020, SBP further facilitated the exporters and importers by allowing extension up to 180 days in settlement of their export and import loans under FE-25 Scheme. Banks can now allow extension up to 180 days to exporters in settlement of their FE-25 loans in case they are facing delay in realization of export proceeds due to COVID-19. Moreover, banks can also allow settlement of FE-25 loans to exporters through substitute contract during the extended period of 180 days where the original export contract has been cancelled due to COVID-19. Likewise, SBP has also allowed the bank to extend the maturity of FE-25 import loans by 180 days. This facilitation has been provided to exporter and importers for their foreign currency loans maturing up to September 30,2020.

Circular:
http://www.sbp.org.pk/epd/2020/FECL17.htm

SBP provides exporters an increased limit of Rs 190 billion

On Aug 19, 2020, SBP enhanced the limit of refinancing provided to the banks under Exports Finance Scheme (EFS) by Rs 100 billion. Hence, banks will now have overall limits of Rs 700 billion for the exporters for FY21. Moreover, to promote export oriented investment, Rs 90 billion have also been allocated under Long Term Financing Facility (LTFF) for the FY 21.This amount is in addition to limit of Rs 100 billion already allocated to banks/DFIs under Temporary Economic Relief Facility (TERF) - a concessionary refinance scheme for setting up of industrial units.

Details:
http://www.sbp.org.pk/press/2020/Pr-19-Aug-20.pdf

SBP reduces markup rate under Long Term Financing Facility (LTFF) to 5% for all sectors across the board

On Jul 08, 2020, SBP reduced its refinance rate under LTFF for non-textile sector by 1% and therefore the end user rate for all sectors across the board will be 5%. Earlier the end user markup rate under this scheme were 5% for textile sector and 6% for non-textile sectors. It is expected that the above measures will help facilitate long term investment in both domestic and export market.

Circular:
http://www.sbp.org.pk/smefd/circulars/2020/CL19.htm

SBP has a strategic objective to support exports for sustained improvement in Pakistan's balance of payments and growth. To this end SBP provides refinance to banks to provide cheap credit at interest rates that vary between 3 to 6 percent to exporters for working capital and new projects under Export Finance Schemes (EFS) and Long Term Financing Facility (LTFF) schemes. The total subsidized credit to exporters outstanding under both these schemes is currently approximately Rs. 660 billion. Due to the COVID-19 pandemic Pakistan's exporters are facing declining demand in overseas markets and problems in executing existing orders. To support exporters in these circumstances and to prevent current liquidity problems from turning into solvency problems amongst exporters, SBP has announced following several measures today.

Relaxation in matching amount

Availing cheaper credit under EFS is linked with the export performance. Currently, exporters are required to export twice the amount of borrowed funds. In case of failure in meeting the requirement penalties are imposed and the credit limit for the next year is also reduced accordingly. SBP has reduced the performance requirement from twice to one-and-a-half times that will be effective for the current year as well as for FY21.

Extension in time period to meet performance requirements

Exporters were required to show performance under the EFS schemes by end of June 2020. This period has been extended by 6 months to end December 2020. Since the additional period will also be counted towards setting new limits, this will help the exporters in availing higher limits for FY21.

Extension in time period to ship goods

Exporters availing the subsidized credit schemes are required to ship their goods within 6 months of availing credit under EFS. In case of failure, penalties are imposed. This period has been extended from six to twelve months. Therefore, exporters will not be liable to pay penalties due to breach of this condition during January to June 2020.

Relaxation in conditions for Long Term Financing Facility

Exporters who want to avail credit under Long Term Financing Facility (LTFF) are required to have exports worth 50 percent, or USD 5 million, of the total sales to become eligible. This limit has been reduced to 40 percent or USD4 million for all the borrowings under LTTF during the period January 01, 2020 to September 30, 2020. Moreover, under the requirement of annual projected exports performance for four years to avail LTFF for new or BMR projects has been extended by another one year. Now the projected exports performance will be measured in 5 years.

Circular:
http://www.sbp.org.pk/smefd/circulars/2020/C5.htm

Realization of export proceeds

Another major relaxation has been provided to the exporters on foreign exchange side. Keeping in view the difficulties faced by the exporters, SBP has also allowed banks to enhance the time period for realization of exports proceeds from existing requirement of 180 days to 270 days on a case by case basis where the delay is related to COVID-19. This would help exporters to provide extended time to their buyers in making payment due to above pandemic. Likewise, to facilitate importers, SBP has extended the time period for import of goods into Pakistan against advance payment from existing requirement of 120 days to 210 days.

Circular:
http://www.sbp.org.pk/epd/2020/FECL7.htm

Exporters can directly dispatch the shipping documents

SBP has allowed exporters to directly dispatch the shipping documents of their exports' consignment to their foreign buyers without any limit, subject to condition that the exporter's export over-dues are less than one percent and the exporter has exports of at least USD 5 million during the previous three years. Earlier, exporters could dispatch the shipping documents directly to their foreign buyers for export consignments of up to USD 100,000/, or equivalent in other currencies. This limit was in place since 2017.

Circular:
http://www.sbp.org.pk/epd/2020/FECL5.htm

Limits on advance payments for imports increased

Moreover, SBP has enhanced the existing limit of USD 10,000/, or equivalent in other currencies, per invoice allowed to banks to make advance payment on behalf of manufacturing & industrial concerns and commercial importers for import of raw material, spare parts and machinery, to USD 25,000/.

These measures are in continuation of facilitating export-oriented industries and manufacturing concerns in the backdrop of ease of doing business and promoting exports' growth and will further contribute in improving economic outlook of the country.

It is pertinent to mention here that in January 2020, SBP had taken certain measures to facilitate export-oriented industries and manufacturing concerns. These included:

  1. Extending the facility to make advance payment up to USD 10,000/, or equivalent in other currencies, per invoice, for import of raw material, spare parts and machinery to commercial importers as well in addition to manufacturing & industrial concerns, allowed earlier.

  2. Allowing Authorized Dealers to effect import advance payment against irrevocable letter of credit, up to 100% of the value of letter of credit, for import of plant, machinery, spare parts and raw material etc. on behalf of manufacturing concerns for their own use only.

  3. Extending the facility allowed to manufacturing & industrial concerns for import of raw materials and spare parts on open account basis to commercial importers as well.


Circular:
http://www.sbp.org.pk/epd/2020/FECL4.htm

Provision of Disinfected Currency Notes by Banks (Updated on Jun 04, 2020) 

In addition to the precautionary measures, social distancing SOPs/ guidelines already issued by the GoP/ WHO; banks are advised to mandatorily comply with the following operational guidelines, with immediate effect:

  1. The commercial bank/CIT interested in deposit/withdrawal of cash from SBP BSC shall coordinate with respective SBP BSC field office(s) and seek the time to visit the office for the purpose. The bank/CIT will be allowed access in the SBP BSC premises only at the time allocated to them.

  2. Commercial bank/CIT shall ensure minimum/efficient deployment of staff for cash deposit/ withdrawal from SBP BSC Offices, in order to mitigate spread of the COVID-19 virus.

  3. Wearing of face masks, latex gloves is mandatory for bank representatives / CIT staff entering SBP BSC premises. Similarly, while entering the bank's premises temperature screening of all such visitors shall be carried out by SBPs security officials.

  4. Commercial bank representatives / CIT staff exhibiting symptom(s) including but not limited to coughing, sneezing, fever etc; shall not be engaged in cash handling/storage/transportation. While screening at SBP BSC, if any of the bank /CIT staff exhibits any of the aforementioned symptoms, such individuals will not be allowed to enter SBP BSC office(s).

  5. Commercial bank representatives / CIT staff to ensure compliance of all preventive measures related to social distancing including guidelines issued by the Government of Pakistan and WHO, while present in SBP BSC premises.

  6. It should be ensured that banknote deposits (all denom) are shrink-wrapped in accordance with the Banknote Packing Instructions, as the same shall be disinfected before deposit in SBP BSC vault.

  7. Furthermore, commercial banks/CITs shall adopt similar practices / precautionary measures during interbank/intra-bank cash dealings.

  8. Commercial banks/CIT companies are encouraged to facilitate testing of all employees suspected of contracting COVID-19 to present the image of a socially responsible institution.

Circular:
http://www.sbp.org.pk/cmd/2020/C_2.pdf

Earlier, recognizing the need for issuance of fit, authenticated and disinfected cash by the banks, detailed instructions were provided by SBP to ensure to clean, disinfect, seal and quarantine all cash being collected from hospitals and clinics and to block circulation of such cash in the market. The banks shall report daily collection of cash from hospitals to SBP, which shall credit bank's accounts for the amounts so quarantined by them. Further, arrangements are being made to provide sufficient fresh or disinfected cash to banks enabling them to issue fresh cash or the re-issuable cash that remained in quarantine for at least fifteen (15) days to their clients. Banks have been ensured that SBP has sufficient quantity of such cash, and it would meet all demands for such cash.

Circular:
http://www.sbp.org.pk/acc/2020/C1.pdf

Prime Minister's COVID-19 Pandemic Relief Fund-2020 (Updated on Apr 07, 2020) 

The fund will accept donations/contributions from people living inside and outside Pakistan through various methods. For this purpose, a separate bank account has been set up at National Bank of Pakistan (NBP) to collect funds.

The fund will be administered by the Poverty Alleviation and Social Safety Division in consultation with the Finance Division.


Circular:

http://www.sbp.org.pk/acc/2020/C2.pdf

Banks not to charge service fee on donations through payment cards

We have instructed the banks not to charge any service fee including Interchange Reimbursement Fee (IRF), Merchant Discount Rate (MDR), Merchant ID Fee, onboarding fee or any other fee that may be applicable on any payments/donations to the Prime Minister's as well as provincial governments' Covid-19 Pandemic Relief Funds through payment cards.

Circular:

http://www.sbp.org.pk/psd/2020/CL2.htm

 
       
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