Day: June 23, 2023

Trade turnover between Russia and Pakistan has grown by over a third since last summer, as the two countries bolster economic ties, Pakistan’s minister for commerce, Syed Naveed Qamar, told RIA Novosti on Wednesday.

Bilateral trade from July 2022 to May 2023 surged by 34%, reaching $760.5 million, compared to $567.5 million in the same period the previous year, Qamar announced.

The official pointed to difficulties that Russia is experiencing in US dollar settlements due to sanctions, adding that barter trade between Moscow and Islamabad will reduce dependence on foreign currencies, including dollars and euros. He added that bilateral cooperation could be deeper; however, transactions using the SWIFT interbank messaging system create problems in trade with Russia.

“We have launched a barter agreement for companies in specific countries that face problems using conventional banking channels. For example, now it is Afghanistan, Iran and Russia,” Qamar explained.

Economic cooperation between Russia and Pakistan has been bolstered over the past year as part of Moscow’s drive to diversify trade partners in response to Western sanctions.

Earlier this month, Islamabad received its first cargo of Russian oil paid for in yuan. The transaction signaled a shift in Pakistan’s dollar-dominated export payments policy. The cargo was delivered to Karachi port under a deal struck by Moscow and Islamabad in January. The first order under the deal was placed in April.

Source: Russia Today

Pakistan’s imports from India jumped on a year-on-year (YoY) basis during May.

Sources told ProPakistani that with the jump in May, India is now among the top ten countries that Pakistan imports from.

The country’s imports from India stood at $23 million in May, up 12 percent from imports of $20.2 million recorded in May 2022. This is the second time during the current fiscal year that the country’s monthly exports from India have posted an increase on a year-on-year basis.

It is pertinent to mention here that trade relations between Pakistan and India have been on hold since 2019. According to officials of the Ministry of Finance, only imports of pharmaceutical products are allowed from India.

According to data released by the Pakistan Bureau of Statistics (PBS), on a year-on-year basis, Pakistan’s overall exports witnessed a decline of 16.69 percent and were recorded at $2.186 billion in May 2023 against the exports of $2.624 billion in May 2022.

Source: Pro Pakistani

State Bank of Pakistan (SBP) has allowed fintech operators or Electronic Money Institutions (EMIs) to shut down their operations if they want to continue to launch their services for a limited time period in the country.

In its revised regulations for EMIs operators, the banking regulator stated that EMIs can discontinue their business after a period, but these entities shall submit their exit plan at the time of applying for In-Principle approval.

Considering the prevailing situation, commercial and microfinance banks are introducing digitizing and technological innovations in systems and services, on the other hand, digital banks are also planning to launch their business, thereby the scope of fintech operators seems challenging due to intense competition in the financial industry despite the highly untapped banking exists market in Pakistan.

The SBP has given approval to four (04) EMIs to launch commercial operations while six (06) EMIs are at different licensing stages. Besides, the license of one operator has been revoked due to non-compliance with regulations and one UK-based EMIs withdrew its license this year. As of March 2023, the operational EMIs have opened close to 1.6 million e-money wallets with a total outstanding e-money of Rs. 2 billion.

The EMIs, currently at any stage of SBP licensing shall within two months of issuance of these regulations, shall submit their exit plan to the relevant department of the banking regulator.

The EMIs shall ensure to allocate sufficient funds within Pakistan for the execution of their exit plans. The exit plan may cover a minimum time horizon of the business plan addressing different stress scenarios as well as EMI’s likely responses. The envisaged exit plan may include product portfolio exit, liquidation of the EMI or sale/transfer of shares to a third party. All such options shall be explored with adequate risk assessments.

The exit plan shall also provide for adequate protection of customers and relevant stakeholders as well as responsible and effective communications with the concerned stakeholders, the draft of the revised regulation said. The exit plan shall remain dynamic to reflect current circumstances and EMIs shall review and update the same regularly.

The EMIs shall establish alerts or thresholds, which may lead to an evaluation and decision of whether to put in place various contingency measures or to resort to invoking the exit strategy itself.

During the exit period, the EMI shall ensure the full discharge of all its connected obligations and responsibilities to customers, SBP, and other stakeholders. The EMI should also submit the exit strategy for the outsourcing arrangements including the technology outsourcing.

Outsourcing Policies for EMIs

EMIs shall not outsource, outside Pakistan, any of its function(s) without prior written approval from SBP. EMIs intending to embrace cloud-based services are advised to comply with the “Framework on Outsourcing to Cloud Service Providers”.

EMIs shall ensure that any outsourcing arrangement with third parties and group companies shall be at arm’s length. For developing their outsourcing policies, EMIs, keeping in view the nature, size, complexity, and organizational level risks, shall refer to the Framework for Outsourcing Risk Management issued by SBP from time to time in order to develop their policies.

Source: Pro Pakistani