981114

SD Circular No. 12
14th November, 1998

All Scheduled Banks and NBFIs,

Dear Sir,
Rupee Counterpart of Special U.S. Dollar Bonds Sold Against Foreign Currency Deposits - Treatment of.

Please refer to Securities Department Circular Nos. 06, 07, 09, 10 and 11 dated 4th August, 27th August, 5th October, 6th November and 12th November, 1998 respectively.

It has been decided that Rupee counterpart of Special U.S. Dollar Bonds sold against balances of Foreign Currency Accounts or Foreign Currency Certificates of Investments - currently restricted under F.E. Circular No. 12 dated the 29th May, 1998 - may be retained by the Scheduled Bank or Non-Bank Financial Institutions, initially for a period of one year. However, the rate of return has to be paid by the concerned Scheduled Bank/NBFI on retention of Rupee counterpart proceeds of Special U.S. Dollar Bonds sold against foreign currency deposits for the period of retention of Rupee counterpart amount to the Government of Pakistan. The rate of return will be worked out as an average of three latest weighted average yield of Six Months Government of Pakistan Market Treasury Bills sold through auctions. Interest will be paid on quarterly basis.

However, equivalent U.S. Dollar of Special U.S. Dollar Bonds sold by banks in cash either bearer/registered shall be deposited to State Bank of Pakistan’s Account with National Bank of Pakistan, New York (Special U.S. Dollar Bonds Account) under advice to State Bank of Pakistan, Karachi/Lahore Offices. The Rupees counterpart of such U.S. Dollar will be credited to Government Account on official rate by State Bank on confirmation of receipt of funds in its account from National Bank of Pakistan, New York.

Yours faithfully,

Sd/-
(Muhammad Suleman)
Joint Director
Ph: 2429734