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020318
STATE BANK OF PAKISTAN EXCHANGE POLICY DEPARTMENT KARACHI
F.E. Circular No. 7
March 18, 2002
All Authorised Dealers
in Foreign Exchange
Dear Sirs,
Foreign Currency Deposits Under FE-31 Scheme (Incremental Deposits)
Attention of the Authorised
Dealers is invited to FE Circular No.31 of 1998, in terms of which banks are required to
surrender to SBP their deposits mobilized under FE-31 and rupee equivalent of the foreign
currency surrendered is paid by the State Bank to the banks and forward cover is provided
by the State Bank on tap basis at the option of the Authorised Dealers.
2. With a view to further liberalize the forex market the following has been decided
in respect of FE-31 deposits:
(a) With effect from April 01, 2002, Authorised Dealers would not be required to surrender
to SBP the foreign currency deposits mobilized by them.
(b) With effect from April 01, 2002, no fresh forward cover will be provided by the SBP.
(c) No rollover of forward cover will be allowed with effect from April 01, 2002.
(d) Authorised Dealers will be allowed to take up their forward covers both for deposits
and to the extent of accrued interest from SBP by paying equivalent Pak Rupee at booked
rates. Premature take up would also be permissible.
(e) Upto June 30, 2002, CRR and SLR on FE-31 deposits will remain applicable as per
existing procedure.
(f) With effect from July 01, 2002, the same CRR and SLR will be applicable on FE-31 as is
applicable to FE-25.
(g) As regards reporting requirement, effective 6th July, 2002 (reporting date), the
amount of FE-25 deposits reported under Code 80-03(i) & Code 80-03(ii) of Weekly
Statement of Position (WSP) being submitted to Banking Supervision Department should also
include the amount of FE-31 deposits. During the transitory period from July to December
2002, the banks should clearly specify at the foot of the same page of WSP (by way of an
asteric), the bifurcation of amounts reported under code 80-03(i & ii) into FE-25 and
FE-31 deposits. Effective Ist January 2003, FE-31 deposits would form an integral part of
FE-25 deposits, hence all deposits under FE-31 shall cease to exist and will be shifted to
F.E-25 for which the Authorised Dealers would develop their own arrangement/mechanism.
You are requested to bring the above to the notice of all the constituents.
Yours faithfully,
(M. R. MEHKARI)
Director
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