Aug 312017
 

ISLAMABAD: Pakistan’s economic managers are all set to launch a major scheme for luring commercial banks to establish joint ventures with hundreds of branches of international banks operating at selected destinations in Gulf, Europe, USA, Malaysia and others to boost up remittances from overseas workers through official banking channels.

The government will bear the cost to incentivise the commercial banks to ensure speedy delivery of money in each nook and corner of Pakistan. These commercial banks will have to establish joint ventures with branches of hundreds of international banks located at desired destinations in a bid to reduce the patronage of Hundi and Hawala businesses.

The country’s remittances from overseas Pakistanis stood at $19.303 billion in the fiscal year 2016-17 against $19.917 billion in the previous fiscal, indicating that the growth in remittances almost got choked.

In the wake of rising current account deficit and choking of remittances growth in recent years, the Ministry of Finance and State Bank of Pakistan are working together for finalising a scheme to boost up remittances from selected destinations where Pakistani workers in the range of around 8 million are working and remitting money from abroad. “There will be cost involved in this proposed scheme and a few billion rupees will be utilised to increase the workers’ remittances in the range of $2 to $3 billion on annual basis,” top official sources confirmed to The News here on Tuesday.

The approval of Federal Minister for Finance Ishaq Dar is awaited for moving ahead with this proposal, the official said and added that Gulf region, European Union, USA, Canada and Malaysia would be given top priority. The major attractive destinations are Saudi Arabia, the UAE, Qatar and other parts of Gulf Cooperation Council (GCC).

Pakistan’s remittances had reached $ 14.1 billion during July-March FY2017 as compared to $14.387 billion and registered a negative growth of 2.3 percent as compared to the last year. Year on year basis remittances inflow dropped marginally by only 1 percent, however on month on month basis March-February about 20 percent of increase is recorded.

The trend was projected to continue in coming months. The major share of remittances originate from Saudi Arabia 29.01 percent (US$ 4,078.07 million), UAE 22.23 percent (US$ 3,124.40 million), USA 12.3 percent (US$1,729.60 million), other GCC countries 12.14 percent (US$1,706.04 million), UK 11.77 per cent (US$1,655.06 million), EU 2.37 percent (US$332.54 million) and other countries 10.19 percent.

Remittances during July-March FY2017 have declined by 6.23 percent from Saudi Arabia, 2.5 percent from the UAE, 8.5 percent from United Kingdom, 3.8 percent from other GCC countries, and 6.9 percent from USA, while from other countries and EU countries it increased by 29.17% and 16.29%, respectively compared to the same period last year. However, during July-March FY2017, remittances declined due to inflows drop from all the three major corridors — the GCC, US and UK. Decline in remittances from Saudi Arabia along the GCC was on account of slow economic activities in these countries along with fiscal consolidation due to decline in oil prices. Due to seasonal factors like Ramadan and Eid, the flow of remittances increased as workers remit more money due to which remittances declined in the first quarter. This will be offset by growth in remittances during coming months.

For the US, it was the tightening regulatory environment for anti-money laundering and counter-financing of terrorism (AML/CFT) that has contributed to lower inflows. The main reason for the decline from the UK was the Pound’s depreciation against the US dollar following the Brexit vote on June 23, 2016; this had led to a significant drop in the dollar value of remittances sent from the UK.

However, Pakistan’s official circles believed that the development activities under Saudi Arabia’s vision 2030 which provides a roadmap for Kingdom’s development and economy for next 15 years, the FIFA world Cup 2022 in Qatar and Expo 2020 in Dubai would create more labor demands for Pakistani workers thus remittances could boost up in months and years ahead. The News

 Posted by at 11:23 pm
Aug 282017
 

The Habib Bank Limited has announced its decision to wind up operations in New York following intimation from the state’s financial regulator as it seeks to impose a hefty penalty of nearly $630 million on the bank, it emerged on Monday.

The fine is going to be imposed for violation of the compliance programme, according to the NYDFS.

The bank management has informed the Pakistan Stock Exchange of the incident and pledged to immediately seek recourse from the concerned authorities. After the decision of imposing the fine, the bank has decided to voluntarily close down its operations in New York.

“HBL has voluntarily decided to close its operations in New York in an orderly manner and DFS has allowed HBL to submit a voluntary application for the orderly winding down operations in New York,” said the letter from the bank management to the PSX.

The letter termed the civil monetary penalty of up to $629,625,000 “outrageous”.

“HBL shall vigorously contest this in the scheduled administrative hearing and the courts of law in the US as being unjustified, capricious, unreasonable not supported by facts or law and as being time barred.

There will be no material impact on HBL’s business outside of the US and HBl will continue to service the requirements of its domestic and international customers, including US dollar business,” the letter states further.

The bank has also lodged an appeal against the decision with the DFS, which has accepted the application for winding down the branch.

The bank has also released a detailed response to the incident.

It clarified that a penalty has not been imposed but it is, in fact, a ‘notice of hearing’ that seeks to impose a civil monetary penalty. “Payment of penalty is subject to the approval of the State Bank of Pakistan,” it said.

It explained that the timeline of withdrawal of business in New York will be determined in consultation with the regulators.

 Posted by at 2:56 pm
May 262017
 

ISLAMABAD, May 26 (APP): Finance minister Ishaq Dar Friday, lauding the contributions made by expatriate Pakistanis, announced that the government wanted them to invest in the national infrastructure and in that connection, US$ 1 billion non-convertible bond would be issued.
The proposed bond would be floated through establishment of Pakistan Development Fund, he said.
The minister informed the Capital Development Authority would also announce a separate sector to make expatriates’ investment secure in the real estate of the country.

 Posted by at 11:52 pm
May 052017
 

In a move that may eventually force influential people to disclose their offshore beneficial ownerships, a Senate panel on Wednesday proposed an amendment to the Companies Bill to make it binding on non-resident and dual-national Pakistanis to disclose their monetary interests abroad.

The Senate Standing Committee on Finance amended Clause 452 of the under discussion Companies Bill 2017 that deals with companies’ global register of beneficial ownerships. The Securities and Exchange Commission of Pakistan (SECP) also endorsed the committee’s proposal, which will ensure that the government backs the new amendment at the time of final voting in the National Assembly. Continue reading »

 Posted by at 11:16 am
Apr 282017
 

Defence Savings Certificates

Certificates can be purchased from any National Savings Centre (NSC), Pakistan Post Offices (PPO), Authorized branches of Scheduled Banks and State Bank of Pakistan (SBP) by filling in a prescribed form called SC-1, which is available at all the above offices of issue free of cost. A copy of the Computerized National Identity Card (CNIC) or in case of a foreign national, a copy of the Passport is required to be attached with the application form.

These certificates can be purchased by depositing cash at the issuing office or by presenting a cheque. The certificates shall immediately be issued on receipt of cash. However, in case of deposit through cheque the certificates shall be issued from the date of realization of the cheque after receipt of the clearance advice.

These certificates are encashable at par any time after the date of purchase. However, no profit is payable if encashment is made before completion of one year.
NOTE: The encashment of certificate(s) may be allowed through a person duly authorized (in writing) by the investor on an authority letter under his / her signature provided that:-
(a). the signatures of the authorized person are attested by the investor on the letter of authority;
(b). the Officer Incharge of the NSC is personally satisfied that the authorized person is genuine and the certificate(s) is / are properly discharged under genuine signatures and both the signatures i.e. on the back of the certificate(s) and the letter of authority tally 100% with the specimen on the investor available on the record.
(C). The receipt of the amount is got acknowledged from the authorized person on the reverse of certificate(s) personally by the Centre In charge.

Rate of return

In this scheme the profit is paid on maturity or encashment for completed years. Every Rs.100,000/- will become Rs.105,000/-, Rs.111,000/-, Rs.118,000/-, Rs.126,000/-, Rs.135,000/-, Rs.145,000/-, Rs.156,000/-, Rs.169,000/-, Rs.185,000/- and Rs.205,000/- on completion of 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10 years, respectively. These rates are effective from 1st Oct, 2016. The average compound rate of return on maturity presently works to 7.44% p.a. For any other time period rates table is also available on website.

Tax and Zakat deduction

Exemption of deduction of Withholding tax has been withdrawn w.e.f 01-07-2013 on profit of investment upto Rs.150, 000. W.e.f. 1st July, 2014 the rate of tax to be deducted under Section 151 of Income Tax Ordinance 2001 shall be 10% of the yield or profit for Filers and 17.5% of the yield or profit paid for Non-Filers. Provided that for a non-filer, if the yield or profit paid is rupees five hundred thousand or less, the rate shall be 10%. The Zakat is collected at source as per rules.

 

Regular Income Certificates

 

These certificates are available in the denomination of Rs.50,000, Rs.100,000, Rs.500,000, Rs.1,000,000, Rs.5,000,000 & Rs.10,000,000/=. Profit is paid on monthly basis reckoned from the date of issue of certificates.

These certificates can be purchased by a single adult, a minor or two adults in their joint names with the options of payable to the holders jointly (Joint-A ) or payable to either (Joint-B). An adult can also purchase these certificates on behalf of a single minor, two minors jointly or himself/herself and a minor jointly. Institutions may also invest individual funds such as pension, gratuity, superannuation, contributory provident funds and trusts etc.

These certificates can be purchased from any National Savings Centre (NSCs) or from Pakistan Post Office (PPO) by filling in a prescribed form called SC-1, which is available at all the above offices of issue free of cost. A copy of the Computerized National Identity Card (CNIC) or in case of a foreign national, a copy of the Passport may be attached with the application form (SC-I).

The minimum investment limit is Rs.50,000/-, however, there is no maximum investment limit in this scheme.

These certificates are enchase able any time subject to deduction of service charges at the following rates:
If enchased before completion of one year from the date of issue. @ 2.00% of the face value
If enchased after one year but before completion of 02 years from the date of issue. @ 1.50% of the face value
If enchased after two years but before completion of 03 years from the date of issue. @ 1.00% of the face value
If encashed after three years but before completion of 04 years from the date of issue. @ 0.50% of the face value
Further, certificates purchased on or after 15-11-2010 cannot be automatically reinvested.

Rate of Return

At the prevailing rates monthly profit of Rs.530.00 (including withholding tax) is paid on investment of each Rs.100,000/-. This way the profit rate works to 6.36% p.a. However, the facility of automatic reinvestment of profit to earn further profit is not available in this scheme. The monthly profit, if not drawn on due date shall not earn further profit.

Tax and Zakat deduction

W.e.f. 1st July,2014 the rate of tax to be deducted under Section 151 of Income Tax Ordinance 2001 shall be 10% of the yield or profit for Filers and 17.5% of the yield or profit paid for Non-Filers. Provided that for a non-filer, if the yield or profit paid is rupees five hundred thousand or less, the rate shall be 10%. However, the investment made in this scheme is exempt from collection of Zakat.

 

Special Savings Certificates

 

These three years’ maturity certificates are available in the denomination of Rs.500, Rs.1000, Rs.5,000, Rs.10,000, Rs.50,000, Rs.100,000, Rs.500,000 and Rs.1,000,000. Profit is paid on the completion of each period of six months.

The minimum investment limit is Rs.500/-, however, there is no maximum investment limit in the scheme.

Rate of Return

At prevailing rates, the profit is paid @ 5.80% p.a. for 1st five profits and @ 6.20% p.a. for the last profit. However, if the profit is not withdrawn on due date it will automatically stand reinvested and would be calculated for further profit on completion of the next 06 months’ period.

Tax and Zakat deduction

the rate of tax to be deducted under Section 151 of Income Tax Ordinance 2001 shall be 10% of the yield or profit for Filers and 17.5% of the yield or profit paid for Non-Filers. Provided that for a non-filer, if the yield or profit paid is rupees five hundred thousand or less, the rate shall be 10%. Zakat is collected at source as per rules.

 

 

Behbood Savings Certificates

Keeping in view the hardships faced by the widows and senior citizens, this ten years’ maturity scheme was launched by the Government on 1st July, 2003. Initially the scheme was meant for widows only, however, the Govt. later decided to extend the facility for senior citizens aged 60 years and above with effect from 1st January, 2004. These certificates are available in the denominations of Rs.5,000/-, Rs.10,000/-, Rs.50,000/-, Rs.100,000/-, Rs.500,000 and 10,00000/-. Profit is paid on monthly basis reckoned from the date of purchase of the certificates.

A certificate may be purchased by any of the following Citizen of Pakistan, namely:-
(a) A senior citizen aged sixty year or above: and
(b) A single widow so long as she does not re-marry, and
(c) two eligible persons as in clause (a) and (b) in their joint names:
payable to the holders jointly or payable to either with the written consent of the other (Joint class-A); and
Payable to either (Joint class-B)

Who can purchase

These certificates can only be purchased from the National Savings Centre (NSCs) by filling in a prescribed form called SC-1, which is available at the offices of issue free of cost. For senior citizens, a copy of the Computerized National Identity Card (CNIC)/National Identity Card for Overseas Pakistanis (NICOP) and for widows besides CNIC/NICOP, a copy of death certificate of husband duly issued from concerned department and undertaking on stamp paper being still widow duly attested by Notary Public/Oath Commissioner under his seal and stamp.
Investment limit

The minimum investment limit in this scheme is Rs.5,000/- and multiple thereof, whereas, the maximum limit of investment for a single investor is Rs. 5 million and for Joint investor (Category A or B) is Rs.10 million. However, under no circumstances the investment beyond the prescribed limit is allowed, no matter such investment is under single or multiple registration, made on a single or different dates, is being maintained in a single or different National Savings Centers throughout Pakistan. In case, any such investment beyond the prescribed limit is pointed out at any stage, shall be treated as irregular abinitio and encashed immediately with zero profit. Further any amount of profit already collected/due thereon, shall be liable to be recovered/ deducted from the certificates holder/recipient of profit/ deposited amount, as the case may be.

After death of purchaser

In the event of death of purchaser(s) in case, the nominee is not eligible investor as mentioned under the heading “who can invest” no profit reckoned from the date of death of the purchaser(s) shall be paid except payment of the deposited amount/face value/ principal deposit. However, in case, where nominee is eligible to invest in BSCs, the certificate shall be transfer to his/her name, who would be entitled for rate of profit as was being paid to its original purchaser, provided there is no legal case or order of court of law issued against it.

Redemption

The certificates can be enchased any time after issuance subject to deduction of service charges at the following rates:
If enchased before completion of 01 year from the date of purchase. @ 1.00% of the face value
If enchased after one year but before completion of 02 years from the date of purchase. @ 0.75% of the face value
If enchased after two years but before completion of 03 years from the date of purchase. @ 0.50% of the face value
If enchased after three years but before completion of 04 years from the date of purchase. @ 0.25% of the face value
If enchased after completion of 04 years No service charges
Further, certificates purchased on or after 15-11-2010 cannot be automatically reinvested. However, other better options are available for investment in National Savings Schemes.
NOTE
The encashment of certificate(s) may be allowed through a person duly authorized (in writing) by the investor on an authority letter under his / her signature provided that:–
(a). the signatures of the authorized person are attested by the investor on the letter of authority;
(b). the Officer In charge of the NSC is personally satisfied that the authorized person is genuine and the certificate(s) is / are properly discharged under genuine signatures and both the signatures i.e. on the back of the certificate(s) and the letter of authority tally 100% with the specimen on the investor available on the record.
(C). The receipt of the amount is got acknowledged from the authorized person on the reverse of certificate(s) personally by the Centre In charge.

Rate of Return

At the prevailing rates monthly profit of Rs.780/- is paid on investment of each Rs.100,000/-. This way the profit rate works to 9.36% p.a. Automatic reinvestment of profit facility to earn further profit is not admissible in this scheme at the scheme’s rate. The monthly profit, if not drawn on due date shall not earn further profit.

Tax and Zakat

The withholding tax is not collected on the profit earned on these certificates. The investment made in this scheme is also exempt from Zakat.

For details please visit //www.savings.gov.pk/

Feb 252017
 

At a time when remittances to Pakistan slow down, a leading mobile financial services company has partnered with a global digital money transfer firm to attract 5% of total remittance flow to the country.

Announcing the formal launch of digital remittance services, in partnership with UK-based WorldRemit, Mobilink International Remittance Mobile Financial Services Assistant Manager Hamza Islam said, “We are targeting to attract $1 billion in remittances in the first year.”

The remittances sent home by overseas Pakistanis have dropped 2% to $10.95 billion in the first seven months (July 2016 to January 2017) of the current fiscal year compared to $11.15 billion in the same seven months of previous year. Continue reading »

 Posted by at 12:45 am
Aug 282016
 

Lahore: As the remittances have registered a decline of more than 36 percent, the All Pakistan Business Forum (APBF) has suggested the government to announce incentives for oversees Pakistanis so that the drop in foreign remittances could be controlled, besides boosting investment in the country by Pakistani expatriates. APBF president Ibrahim Qureshi said that Current Account (C/A) deficit has expanded to US$591mn in July 2016, where US$575mn deterioration was largely owing to US$745mn (or 36% MoM) decline in Workers’ Remittances.
Remittances sent by overseas Pakistan dropped 20 per cent annually to $1.33 billion in July. The oil-rich Arab countries account for almost 65 percent of entire remittances sent by overseas Pakistani workers. Ibrahim Qureshi said that the fall could be a setback for Pakistan as it largely depends on remittances to meet its foreign obligations and reserves. In July, the inflow of remittances from Saudi Arabia dropped by 20 percent, but it was still the highest at $379 million. What is more concerning is the plunge in remittances from the United States and the United Kingdom as inflows from these countries fell by 33.5 and 38 percent, respectively. Remittances from US and UK dropped 6 percent and 8 percent, respectively, in the preceding fiscal year. Continue reading »

 Posted by at 11:13 pm
Aug 122016
 

 

Pakistan Customs on Thursday issued the procedures for importers to file online import form (I-Form) through the online tax system, Web-Based One Customs (WeBOC).

The I-Form is a joint initiative of Pakistan Customs and the State Bank of Pakistan (SBP) to curb under-invoicing and tax avoidance. “This initiative will help in prevention of import related frauds and provide direct interface between customs and banks,” a customs official said.

The I-Form’s filing is now mandatory for importers for subsequent filing of goods declaration and getting the consignment cleared.

Online filing mechanism will be launched as pilot from August 15 and will be functional from September 1. After that, the manual filing of payment details will not be available and the customs authorities will deny clearance of any consignment. Continue reading »

 Posted by at 11:32 pm