Category: Industry

The banking sector of Pakistan has approved loans worth Rs. 30 billion against applications of approximately Rs. 90 billion under the government markup subsidy facility for low-cost housing finance, data released by the State Bank of Pakistan (SBP) showed on Thursday.

The scheme allows the banking sector to use estimation models to assess the informal income of applicants.

A statement by the SBP said, “In order to facilitate low-cost housing finance applicants with informal income, the SBP has asked banks to develop and deploy income estimation model for the extension of low-cost housing finance to such applicants. This measure is expected to ease difficulties being faced by public in availing housing finance under the government’s markup subsidy scheme (G-MSS), commonly known as Mera Pakistan Mera Ghar.”

The markup subsidy facility for the construction and purchase of new homes was announced by the government in October 2020. As a result, the Pakistan Banks’ Association (PBA) developed and circulated among banks a baseline income estimation model through a consultative process.

This model assesses the income and repayment capacity of the applicants – who earn from informal sources – based on their routine expenditures like house rents, utility bills, and educational expenses.

The SBP allowed the banks to use PBA’s baseline model, modify it, or develop their income estimation models. The SBP also made it mandatory for the banks to confirm within four weeks that they have made their informal income proxy models operational.

The SBP said that these models are likely to enhance prospects of informal income applicants to secure housing finance, and it will also allow the financially excluded segment to avail financing under G-MSS.

Several other measures have also been taken by the SBP to make this facility available to the general public, including the relaxation of debt burden ratio, an extension of housing finance against the personal guarantee, development of online complaint resolution portal, and establishment of banks’ joint call center to address queries.

Other measures for the same purpose include standardization and simplification of loan application form, facility offer letter, and documentary requirements for approval and disbursement are also proving beneficial for the applicants under G-MSS, the statement added.

Source: Pro Pakistani

The Securities and Exchange Commission of Pakistan (SECP) has issued guidelines for the issuance of green bonds in Pakistan. The guidelines provide an easy and efficient procedure for the issuance with the concise offering of documents/prospectus.

All the issuers who are eligible to issue debt securities, including sukuk, either by way of public offer or private placement are also eligible to issue green bonds in compliance with the applicable regulatory framework.

The issuance of green bonds will help to initiate sustainable projects for the combating of climate change besides facilitating the issuers of debt securities to diversify their sources of financing.

It will also provide an additional financing instrument to investors who are conscious of financing/re-financing projects that contribute to the environment.

To qualify as a green bond, the proceeds must finance or refinance green projects or activities that involve energy efficiency, protect the environment, utilize renewable energy, prevent and control pollution, use natural resources, land management, pollution-free transportation, wastewater and water treatment, etc.

As per the green bond database, green bonds worth $1.2 trillion have been issued by different countries to date, including $297 billion in 2020 and $130.9 billion in 2021 (to April), showing an increasing trend.

As per the database International Capital Market Association (ICMA), a total of 640 issues of green bonds have been made by 60 countries.

Green bonds can be issued based on globally accepted standards/goals such as the International Capital Market Association (ICMA)’s Green Bond Principles, and the UN’s Sustainable Development Goals (UN SDGs), etc.

Source: Pro Pakistani

Federal Board of Revenue (FBR) Chairman has constituted Anomaly Committee-Technical and Anomaly Committee-Business to identify and remove the technical and legal anomalies in the Finance Bill 2021.

The Anomaly Committee-Technical will be chaired by Naeem Akhtar Sheikh, UHY Hassan Naeem & Co., whereas the Co-Chairmen of the Anomaly Committee-Technical will be Ch. Muhammad Tarique, Member (IR-Policy), and Syed Hamid Ali, Member (Customs-Policy), FBR.

The other members of the Committee are Ashfaq Tola, Abdul Qadir Memon, Patron Pakistan Tax Bar Karachi, Syed Yawar Ali, Chairman Pakistan Business Council Karachi, Shahzad Hussain, Ex-Partner AF Ferguson & Co., Khurram Mukhtar, Patron-in-Chief PTEA, Sadia Nazeer, Partner KPMG, Hafiz Muhammad Idrees, Advocate Supreme Court Ex-President Tax Bar, Habib Fakhruddin and Abdul Wahab Kodvavi.

Similarly, Anomaly Committee-Business will be chaired by Sultan Ali Allana, Chairman HBL, whereas the Co-Chairmen of the Anomaly Committee-Business will be Ch. Muhammad Tarique, Member (IR-Policy) and Syed Hamid Ali, Member (Customs-Policy), FBR.

The other members of the Committee are Ehsan A. Malik, CEO Pakistan Business Council, M. Shariq Vohra, President KCCI, Irfan Siddiqui, President OICCI, Sherbaz Ilyas Ghazanfar Bilour, President Sarhad Chamber, Abdul Samad, President Quetta Chamber, Mian Nasir Hyatt Maggo, President FPCCI, Mian Tariq Misbah, President LCCI, Adil Bashir, Chairman APTMA, Asif Peer, President American Business Council, Asad Shah, Director External Affairs PTC, and Amir Waheed, Ex-President Islamabad Chamber.

The TORs of the Committees will be to review the identified and submitted anomalies and advise FBR on the removal of anomalies. Technical and legal Anomalies can be submitted on or before the close of office hours on Tuesday, June 22, 2021, to the Co-Chairmen, Anomaly Committees in their offices at Room No. 348 (Customs) and Room No. 355 (IR), 3rd Floor, FBR House, Islamabad. The Committee can also be reached at the e-mail ‘memberir@fbr.gov.pk’ (IR related) and ‘membercustomspolicy@fbr.gov.pk’ (Customs related).

Source: Pro Pakistani

The rate of return on National Savings Schemes has been increased.

According to the notification issued by the Ministry of Finance, the rate of interest on 10-year Defense Savings Certificates has been increased from 9.29 percent to 9.35 percent.

The rate of return on regular income savings certificates has been increased from 8.64 percent to 8.76 percent.

The rate of return on six-month short-term savings certificates has been increased from 7.14 percent to 7.20 percent.

Meanwhile, the rate of return on Special Savings Certificates, and Savings Accounts will remain the same.

Behbood, pensioners, and martyr family certificate rates have also been kept unchanged.

Source: Pro Pakistani

The Finance division has agreed to grant a 25 percent disparity reduction allowance to the employees of forteen Federal public sector universities.

Documents available with ProPakistani said that the Finance division on Friday communicated to Higher Education Commission with regard to grant of disparity reduction allowance.

Finance division conveys its approval that the Finance division’s office memorandum dated march 3, 2021 is applicable to the civil employees of BS 1 to 19 of the public sector universities chartered by the federal government under the administrative control of HEC with effect from March 1, 2021.

The universities included Allama Iqbal Open University, International Islamic University, National University of Modem Languages, Quaid-e-Azam University, Air University, National Defence University, Pakistan Institute of Development of Economics (PIDE), Shaheed Zulfiqar Ali Bhutto Medical University (SZABMU), National University of Medical Sciences, Federal Urdu University of Arts, Science & Technology Karachi, National Textile University, Faisalabad, Pakistan Institute of Fashion and Design, Lahore, Karakoram International University Gilgit Gilgit-Baltistan and University of FATA.

However, the public universities chartered by the provincial governments may be advised by the HEC to refer their matter for grant of Disparity Reduction Allowance to the Provincial Finance Departments.

It is pertinent to note that the government had assured the employees back in February this year to grant the 25% disparity reduction allowance from grade 1 to 19 employees and it has now extended to grade 20 to 22 offices to reduce the disparity within the federal government.

Source: Pro Pakistani

In a major move forward, the Pakistan Stock Exchange (PSX) has introduced a new futures eligibility criteria communicating the launch of the 90-day maturity Deliverable Futures Contracts (DFC) with effect from DFC August 2021 which will start from 26 July 2021.

As per the new criteria, there will be no segregation of the A and B categorization, and stocks will be selected based on quantitative factors that measure real liquidity. The Exchange-Traded Funds (ETF) will also be eligible if certain conditions are met. However, the companies that have obtained a stay order from the court against any inquiry/investigation initiated by the Commission will not be eligible. All the eligible companies and ETFs will be eligible for trade on Deliverable Futures and Cash Settled Futures Markets.

The new criteria and the eligible futures list have been notified by PSX through notice no. PSX/N-740 dated 17 June 2021:

On the launch of the 90-day DFC regime and new futures eligibility criteria, Mr. Farrukh H. Khan, the MD PSX, said, Launch of the international standard 90 days DFC is a positive development for the Stock Exchange and for all stakeholders of the capital market. 90 day DFC shall open each month such that the market shall have three different maturities (current month expiry, next month expiry and last month expiry) at the start of each contract month. In addition to this, it will also eliminate the need for a mandatory one week roll-over period as investors can roll-over their existing positions any time before expiry, depending upon the liquidity, hence, alleviating the roll-over week pressure to some extent. The new selection parameters are dynamic and can adopt to any market situation. More companies are now eligible to trade on the futures counter. Based on the recent notified list, 84 companies and 1 ETF are futures eligible.

Khan further stated, “We appreciate the cooperation extended to us by the SECP in this regard, whereby it approved the 90-day DFC regime and new futures eligibility criteria. This is expected to increase volumes and liquidity, and hence improve the depth of the market”.

The PSX is continuously striving to introduce better and enhanced products for its stakeholders and market participants. It also aspires to increase its product offerings and introduce more innovative products in the future.

With the launch of the 90 day DFC and the new futures eligibility criteria, the PSX Future Contract offerings are now in line with international market offerings. This move is part of the PSX’s efforts to enhance liquidity in the Futures market, with more options available for investors in terms of the securities and contracts of multiple expiries.

Source: Pro Pakistani