News Analysis |
State Bank of Pakistan (SBP) on Thursday announced that Deposit Protection Corporation (DPC), set up to safeguard the interests of small depositors, would become operational today (Friday). It also announced issuance of new currency notes worth Rs 350b.
“Consequent upon the promulgation of the Deposit Protection Corporation Act, 2016, the Deposit Protection Corporation has been established as a subsidiary of the SBP for protection of small depositors in order to ensure financial stability of the system,” the SBP said in a circular.
“It’s hereby announced that the Deposit Protection Corporation shall commence its business with effect from 1st June, 2018. Further, in terms of Section 33 and 7 (4) of DPC Act, Deposit Protection Regulations for banks and the guaranteed amount will be communicated in due course.”
With the PML-N’s tenure ending today (Thursday, May 31), the country’s foreign exchange reserves stand depleted, sparking concern over Pakistan’s ability to meet future payment obligations and manage a bulging current account deficit.
The objective of the Corporation as enshrined in Section 5 of the Act is to compensate the depositors for losses incurred by them to the extent of protected deposits in the event of failure of a member institution, as notified by State Bank of Pakistan under sub-section (1) of Section 21, the central bank added.
Read more: State Bank of Pakistan performing despite obstructions
State Bank of Pakistan (SBP) has issued new currency notes worth Rs 350 billion to banks for providing them to the customers and common people on occasion of Eid. According to SBP spokesperson, new currency notes worth Rs 342 billion were issued to the customers on Eid ul Fitr last year. The volume of new currency notes to be provided to the customers on the auspicious occasion of Eid is likely to surpass Rs 350 billion this year.
Also like every year, the State Bank of Pakistan (SBP) has launched an SMS service to issue fresh currency notes by exchanging old ones to the public just before Eid-ul-Fitr. Back in 2015, SBP in Collaboration with Pakistan Bank Association had launched SMS Services for the first time to get new currency notes on Eid. It will make it easy for the public to easily get Fresh Currency Notes from SBP via SMS.
The fresh currency notes will be available from commercial bank branches called “e-branches” and the 16 field offices of the SBP BSC. The issuance of fresh currency through mobile SMS service will commence from 1st June till 14th June 2018.
Read more: State Bank Pakistan reports decline in Foreign Direct Investment
The service will be provided through 1,000 e-branches in 120 cities across Pakistan to ensure maximum geographical coverage. The charges for the service are Rs 1.50 plus tax per SMS. The branch IDs of designated e-branches are available at the SBP website, Pakistan Banks Association (PBA) website and commercial banks’ websites. They will also be displayed prominently outside designated e-branches.
State Bank of Pakistan (SBP) on Thursday announced that Deposit Protection Corporation (DPC), set up to safeguard the interests of small depositors, would become operational today (Friday). It also announced issuance of new currency notes worth Rs 350b.
Meanwhile, the end of the N League’s tenure has been met with alarm bells over the foreign reserves of the country. During the week ending May 25, 2018, foreign exchange reserves held by the State Bank of Pakistan (SBP) shrunk by $286.4 million to $10.03 billion, down 2.7 percent, due to payments on account of external debt servicing, SBP data released here on Thursday revealed.
Read more: Can an increase in remittances boost Pakistan’s economy?
The total liquid foreign reserves held by the country stood at $16.40 billion as of May 25, 2018. Foreign reserves held by the central bank amount to $10.03 billion, whereas net foreign reserves held by commercial banks are valued at $6.37 billion, up $41 million or 0.6 percent.
With the PML-N’s tenure ending today (Thursday, May 31), the country’s foreign exchange reserves stand depleted, sparking concern over Pakistan’s ability to meet future payment obligations and manage a bulging current account deficit.