Prize bonds raise Rs20bn
The government has sucked in more than Rs 20 billion from formal and
informal money markets within 40 days.
Senior bankers told that the government has so far sold Rs 20.5 billion
worth of three categories of rupee-denominated prize bonds. The first of the series worth
Rs 15000 a piece were launched on Oct 1 followed by those of Rs 750 and Rs 7500 on Oct 15
and Nov 1, 1999.
The bankers said the bonds of Rs 15000 fetched Rs 12.23 billion in a
one month sellmg period. They said the bonds of Rs 750 mopped up Rs 3.76 billion and those
of Rs 7500 raised Rs 4.56 billion respectively till Nov 11.
The sale of Rs 750 bonds stops on Nov 15 whereas Rs 7500 bonds would
continue selling up to Nov 30.
Senior bankers believe that these bonds would suck in a few billions of
Bankers say most of investment made in these bonds comes from the
informal sector wallowing in excess liquidity in the wake of economic slump that has
triggered depression everywhere including real estatethe erstwhile heaven for
investment for the informal sector.
UBL deposits up
State-run United Bank said its deposit base expanded to Rs 128 billion
at end-June 1999 from Rs 107.9 billion in 1996 which increased its market share from 7 to
9 per cent.
Shared ATM network
Askari Commercial Bank Ltd (ACL) and ABN AMRO Bank announced the
launching of Pakistan's first-ever shared ATM network.
The joint network consists of 23 machines at 18 convenient locations
enabling customers of both to have an access to ABN AMRO Bank's ATMs and Askari Bank's
ATMs throughout the country.
Pakistan's foreign exchange reserves stood at $1.59 billion on Nov 6.
The Statistics showed that on Nov 6 Pakistan had $1.390 billion worth of approved forex
reserves and $200 million worth of forex balances held abroad in cash and short term
The State Bank on Thursday pumped in Rs 4.35 billion into inter-bank
money market by purchasing treasury bills at its open market operation. The State Bank
said the OMO attracted Rs 4.950 billion worth of offers for T bills from the banks. It
said it purchased Rs 3 billion worth of bills for one week at 7.5 per cent and Rs 1.35
billion worth of bills for one month. The remaining offers were scrapped.
Govt borrowing at Rs 24bn
The federal government borrowed Rs 24 billion from the banking system
during first four months of the current fiscal year against its net credit retirement of
Rs 25 billion in the entire fiscal year of 1998-99.
Sources close to the ministry of finance told that during July-October
1999 the government borrowed Rs 43 billion from the banking system whereas it placed Rs 19
billion in a special State Bank account meant for foreign debt retirement. Thus the actual
government borrowing in first four months of the current fiscal year stood at Rs 24
SBP allows NBFIs repo transaction with banks
State Bank of Pakistan has allowed Non-Banking Financial Institutions
(NBFIs) to undertake Repo transactions with schedule banks with effect from November
15,1999 against their holdings of government securities.
The Apex had since June 26, 1996 restricted NBFIs to undertake Repo
transactions, and has decided to withdraw them from November 15,1999.
Bankers said the decision would enable NBFIs to undertake repo
transaction (borrowing) from scheduled banks against government securities which has lower
rate as compared to clean borrowing which required other collateral. The SBP step would
also help in increasing lending to private sector through NBFIs.
The step will also help scheduled banks to disburse more funds in the
economy against secured government securities. As the market was full of liquidity it was
needed to create new avenues of secured lending to revive the economy as well as utilizing
the available resources.
In a separate circular Wednesday the central bank communicated banks
and NBFIs that facility of retention of rupee counterpart proceeds of Special US Dollar
Bonds allowed to them for a period one year will expire on November 14, 1999.
However, the outstanding rupee counterpart proceeds retained by banks
and NBFIs till November 13, 1999 will gradually be adjusted by banks-NBFIs as and when one
year's period to each transaction completes.
SBP further said all funds retained by the banks and NBFIs will be
adjusted on or before completion of one year i.e. November 13, 2000 positively.
HBL target for loan recovery
Habib Bank Limited is expected to pull down its non-performing loans
portfolio by about Rs 12 billion by end of 1999, to Rs 28 billion. The bank's profit of Rs
1.2 billion in 1998, is projected to rise to Rs 2 billion in 1999.
First Habib Bank Modaraba (FHBM) has declared a cash dividend of 15% to
it's certificate holders for the year ended June 30,1999.
The Company has earned a net profit of Rs 74.86 million as compared to
Rs 69.7 million during the corresponding year recorded an increase of Rs 5.16 million (7.4
Curbs on forex remittance to continue
The State Bank may not remove the restriction on outward remittance of
foreign exchange through bank draft and TT without putting in place a procedure to ensure
The State Bank imposed this restriction on Oct 15 as part of a
multi-pronged strategy to stop flight of capital in the wake of the military takeover on
Bankers close to the State Bank told that former Governor Dr Muhammad
Yaqub was of the opinion that there should be a system to ensure transparency in back to
back remittance of foreign exchange.
They said some other senior offficials down the line held the same view
adding that this view might prevail even after the departure of Dr Yaqub to the National
"There are indications that back to back remittance of foreign
exchange may be allowed only to the account holders," said senior treasurer of a