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$280m IMF tranche being released

Finance Minister Ishaq Dar on Thursday disclosed that Pakistan would receive IMF tranche worth $280 million next month (August).

Rs3.32bn earned thru quota auction

The government has earned Rs 3.32 billion during the past two years by auctioning the discretionary quota of textiles, Commerce Minister Ishaq Dar disclosed. He said the PPP regime had generated only Rs 730 million in two-and-a-half years through the auction, while the PML government has earned a record amount as not a single piece of textile was allotted from the discretionary quota.

HBL levies fee on replacement of securities

If you are a Habib Bank client you need now to pay Rs 1000 if you want to replace the security against which you have borrowed money from your bank.

A recent HBL circular says that in addition to the processing charges for credit lines Rs 1000 "are to be invariably recovered at the time of replacement of securities under lien to the Bank."

It says this additional charge would not be recovered at the time of annual review of credit facilities and in case of HBL's own deposits or certificates under lien.

Dollar shoots up to Rs51.90

The US dollar shot up to Rs 51.90 in interbank market on Thursday against Rs 51.80-51.85 on Wednesday as some banks had to foot more than $20 million worth of fuel import bill.

Senior bankers said there was a buying pressure in the inter- bank market that kept the dollar pegged at Rs 51.90 throughout the day. They said the State Bank managed to keep the dollar from rising by helping the banks in footing the fuel import bill of the government.

SBP injects Rs4.75bn

The State Bank injected Rs4.75 billion into the cash-strapped inter-bank money market on Thursday by buying Treasury Bills of one-week to maturity.

Senior bankers said the two-way open market operation of SBP had attracted Rs7.7 billion worth of bids for sale of T-bills and Rs8.95 billion worth of bids for purchase. They said while the SBP rejected all bids for sale it accepted Rs4.75 billion worth of bids for purchase at an annual return of 8.25 per cent.

ADBP recovers Rs273m in stuck-up loans

Agricultural Development Bank of Pakistan (ADBP) has recovered dues amounting to Rs 273 million, out of Rs 388.8 million from defaulters from different parts of Sialkot district.

This was disclosed at a revenue officers' meeting on Thursday which was presided over by the deputy commissioner. The meeting was further informed that more than Rs 305.7 million was recovered from the defaulters as agriculture tax.

Liquidity in money market to rise by Sept

The interbank money market, which has been short of funds for the past few days, is set to see an inflow of over Rs 100 billion by end of September.

Bankers say it is hard to predict how the creation of such a huge liquidity would impact on the market but many of them fear it might lower the deposit rates further.

Bankers say around Rs 17 billion inflow is expected into the market in this month, Rs 53 billion more during August and Rs 31 billion by end of September— all through maturity of government security papers.

But the market has been short of funds for the past few days after the State Bank restored the original cash reserve requirement of 5 per cent of banks deposits from July 12 sucking in about Rs 17 billion from the market.

Bankers say call rates which, oscillated between 0.5-1.0 per cent for the last one and a half months or so, have been in the range of 12-13 per cent for past few days. They say some banks are even borrowing funds from the State Bank to square their positions.

Nevertheless the situation would change. "The inflow of Rs 17 billion or so in the remaining part of this month would make the market quite liquid," said treasurer of a foreign bank. "Then in August and September there would be respective inflows of Rs 53 billion and Rs 31 billion." The banker felt that it would not be easy for SBP to mop up all of this liquidity because that would require appreciation of yield on T-bills and thus push up lending rates.

Treasurer of a local bank said another way for mopping up this liquidity could be sale of dollars by the State Bank in the inter -bank market. But he said as the foreign exchange reserves were not likely to grow fast due to widening trade deficit it would be difficult for SBP to see much of foreign exchange in the market.

Banks asked to wind up prize schemes by Dec 31

The State Bank of Pakistan (SBP) on Tuesday directed banks to phase out existing deposit schemes based on incentives, whether in cash or any kind, completely by December 31, 1999.

In circular BPRD No 29, issued to all banks/NBFIs, the SBP asked banks running "lottery" schemes to submit "a time-bound action plan for their termination, latest by December 31, 1999."

The central bank has also instructed the banks to stop the on-going advertisement campaign in print and electronic media relating to such schemes within seven days.

Besides, no new deposit mobilization scheme based on incentives, whether in cash or kind, will be launched, the SBP circular said.

All public advertisements soliciting deposits from the general public will henceforth expressly indicate the annualised rate of expected return on their deposits, the circular added.