ISLAMABAD – State Bank of Pakistan issued new instructions over theInterest Rates and Deposit Rates.
State Bank of Pakistan (SBP) has revised the systematic reporting patternfor commercial banks to monitor interest rates and deposits rates beingoffered to borrowers and depositors in various schemes and products.
In this regard, the central bank issued guidelines for commercial banksalong with a revised reporting system that will improve the accuracy of thedata and the efficiency of the banking industry.
All the interest rates for SBP concessional schemes like Export FinanceScheme and Long-Term Financing Facility and others like PM’s loan schemefor youth shall be aligned with the prescribed rates.
The central bank instructed banks to verify if any local currency loan ispriced below SBP Reverse Repo Rate. It further asked banks to verifyforeign currency deposits on significantly high-interest rates of more than4%.
Ideally, overnight interbank placement and lending rates, amongconventional banks, shall fall within the SBP Interest Rate Corridor (i.e.Policy Rate – 150 bps to Policy Rate + 50 bps).
Compensated loans and remunerative deposits at abnormally high/low rates(e.g. exceeding 40% or below 2%) shall be double-verified from relevantdepartments/branches before submission, SBP said.
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Gross disbursements are the total amounts disbursed in any currency asloans during the month. It also includes loans renewed or rolled overduring the month. In the case of running finance, the disbursed amount willbe the total amount availed by the borrower during the month.
The overall spread (the difference between the weighted average rate oflending and the weighted average rate of deposit) of any bank shall not benegative.
Foreign currency deposits and loans shall be reported in equivalentPakistan Rupee (PKR) (in thousands). The necessary conversion of foreigncurrency amount into PKR shall be made by using the respective currency’sinterbank exchange rate for the last day of the reporting month.
In the case of conventional bank deposits, banks must check if there is anylocal currency saving deposit reported on an interest rate less than theMinimum Deposit Rate (MDR).
Fresh deposits mean deposits collected during the month. It also includesdeposits of re-priced/rolled-over deposits during the month.
