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STATE BANK OF PAKISTAN - BANKING SUPERVISION DEPARTMENT
BSD Circular No .08 of 2004
28th May, 2004
The Presidents/ Chief Executives
All Banks
Dear Sirs/Madam,
MASTER CIRCULAR-MAINTENANCE OF
STATUTORY LIQUIDITY REQUIREMENT (SLR)
In terms of Section 29 of the Banking Companies Ordinance, 1962, banks are required to maintain Statutory Liquidity Requirement in cash, gold or unencumbered approved securities valued at a price not exceeding “the lower of the cost or the current market price” equivalent to an amount which shall not at the close of business on any day be less than “such percentage” of the total of their time and demand liabilities in Pakistan, as may be notified by the State Bank from time to time.
Presently, banks are required to maintain the liquid assets @ 15% (excluding Statutory Cash Reserve maintained under section 36(1) of the State Bank of Pakistan Act, 1956) of their total time and demand liabilities in Pakistan with effect from 12th July, 1999.
2) In order to facilitate the banks, instructions issued from time to time on the subject have been consolidated and are given hereunder: -
i) The Total Time and Demand Liabilities (TDL) for the purpose of determining Statutory Liquidity Requirement (SLR) and Cash Reserve Requirement (CRR) shall include the following heads of accounts of Weekly Statement of Position (WSP):
a) Demand Deposits (General) (c) Time Deposits (General)
b) Other Demand Liabilities d) Other Time Liabilities
The detail of items included in the above heads of accounts (for reference) is given in the enclosed Annexure-A.
ii) In terms of Section 36 of State Bank of Pakistan Act, 1956 and Section 29
of the Banking Companies Ordinance, 1962, “Liabilities” shall not include the
paid up capital or the reserves or any credit balance in the profit and loss
account of the Banking Company or the amount of any loan taken from the State
Bank or any such liabilities as may be notified by the State Bank for the purpose.
Accordingly, the following liabilities of WSP shall not be taken into account
while computing the TDL:
Liabilities |
Main ‘head ‘ of WSP |
Foot Note of WSP |
| Deposits from banks (Demand) | 01-02 |
- |
| Borrowing from banks (Demand) | 01-03 |
- |
| Deposits from banks (Time) | 02-02 |
- |
| Borrowings from banks (Time) | 02-03 |
- |
| Money at call & short notice in Pakistan | 05-00 |
- |
| Special Exporter’s A/c | - |
81-00 |
| F.E.25
deposits (against which banks are separately required to maintain CRA & SCRA in US $ ) |
01-01
& 02-01 |
80.03
(i) |
All liabilities, except those specifically listed above, shall be included in TDL of banks in Pakistan for the purpose of computing SLR and CRR. For SLR purpose, TDL at the close of business on every Saturday (and if Saturday is a holiday, on the previous working day) shall continue to be taken into account, upto a day preceding the next weekend i.e. Friday.
iii) The composition of liquid assets and their reporting in the Weekly Statement
of Position shall be as under:-
Liquid Assets |
Main ‘head ‘ of WSP |
Foot Note of WSP |
| Cash in PakistanPlus Foreign Currency held in Pakistan |
Code.11.00Code 13.01 |
Code.52.00 |
| Balances with SBP (In Current A/C.) | Code
12.01 |
Code
53.01&02 |
| PLS Term Deposit Account with SBP. | Code
12.01 |
Code
53.06 |
| Balance with NBP. | Code
12.02 |
- |
| Un-encumbered Approved Securities (List as per Annexure B) | Code
17.01to 17.04 |
Code
54.00 |
| Deposits under Section13 (3) of BCO, 1962 (Capital maintained by Foreign Banks) | Code
12.01&Code 17.00 |
Code
56.01& 03Code 56.02 |
| Share Capital of Khushali Bank | Code
17.05 |
Code
90.00 |
iv) In terms of Section 29 ibid, “Balance (of banks) with SBP” is a part of
liquid assets, therefore, the monitoring of compliance with prescribed SLR is
done by the State Bank by including the prevailing percentage of CRR. Presently,
SLR is 15% (excluding CRR of 5% of TDL on weekly average basis) with effect
from 12th July 1999. However, it may be clarified that while monitoring compliance
with SLR the State Bank clubs CRR with SLR in terms of Section 29, which comes
to 20% (including CRR of 5%) of TDL. The banks are required to maintain this
level of SLR (20%) at the close of business on every day.
3) In case of shortfall in maintenance of liquid assets, banks are liable to
pay penalty @ Rs.86/- per hundred thousand or part thereof per day. The penalty
of shortfall in maintenance of liquid assets is charged by the concerned SBP:BSC
(Bank) office on the basis of monthly return as per Form-IX. Furthermore, in
the case of default in meeting prescribed SLR on two or more consecutive weekends,
the penalty for the days during the weekends will be levied on the basis of
shortfall in SLR as of the previous weekend unless the shortfall on any of the
week days is specifically pointed out by the bank in Form IX (e.g. if there
was a default in meeting SLR on the weeks ended 8th and 15th May 2004, the penalty
for the days during these weekends i.e. from 9th to 14th May will be charged
on the basis of amount of shortfall in SLR on the week ended 8th May, 2004).
4) This circular supersedes all previous instructions on the subject.
Please acknowledge receipt.
Encl: ANNEXURE - A, ANNEXURE - B
Yours faithfully,
(JAMEEL AHMAD)
Director
ANNEXURE - A
1. DEMAND DEPOSITS (GENERAL)
a)
All Current Deposits except from banks
b) Demand Portion of Savings Deposits
c) Overdue Fixed Deposits
d) Call Deposits other than from banks (on Demand)
e) Unclaimed balances Accounts
f) Mark up/Interest accrued on all above Accounts
g) All other Deposits payable to public on demand e.g. Payment Orders, Telegraphic/Mail
Transfers, Outstanding Drafts, Demand Drafts, Certificates Payable, etc.
2. TIME DEPOSITS (GENERAL)
a)
Fixed Deposits from customers other than from banks
b) Special Notice Deposits other than from banks
c) Time portion of the Savings Deposits
d) Short Term Deposits Accounts
e) Mark up/Interest accrued on all above accounts
3. OTHER DEMAND LIABILITIES e.g
i)
Margin on LCs
ii) Margin on Guarantees
iii) Locker’s Keys Security Deposits
iv) Unclaimed Dividend/Dividend Payable
v) Security Deposits Account (Amount deposited by Supplier of Stationary and
Furniture etc., as security)
vi) Sundry Deposits Account
vii) Mark up/Interest accrued
viii) Any other miscellaneous liabilities payable on demand
4. OTHER TIME LIABILITIES
i)
Provision for taxation, staff benefits and accrued expenses
ii) Any other miscellaneous liabilities payable on notice or after a specified
period
ANNEXURE-B
Approved Security for the purposes of Section 29 of the Banking Companies Ordinance,1962 has been defined in Section 5(a)(ii) of the said ordinance. Presently, following Securities are eligible as approved securities for maintaining Statutory Liquidity Requirement.
1)
Federal Investment Bonds.
2) Treasury Bills.
3) Pakistan Investment Bonds (holding in Bank’s ‘Own A/c’ equivalent to 5% of
the Total Time & Demand Liabilities).
4) Rupee obligations of the Federal Government or Provincial Government or of
a Corporation, as defined in Section 5(a)(ii) of the BCO, 1962.
5) National Investment Trust Units (Registered).
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