Govt plans to install 747MW plant in Sindh

By: Our Staff Reporter | April 06, 2012 | The Nation

ISLAMABAD: The Government has planned to install an additional 747MW combined cycle power plant at Guddu in Sindh province in order to enhance the power generation for meeting future requirements.
Ministry of Water and Power has asked the relevant executing department to expedite its efforts and complete the required formalities at the earliest so that the proposed generation may be added in the system. Federal Minister for Water and Power Syed Naveed Qamar will preside over a meeting with the officials concerned of NTDC in order to gear up the activities for this project.
According to details, the proposed power project would comprise a 747MW combined cycle power plant consisting of two gas turbines of 243MW each, two heat recovery steam generators (HRSG) followed by one steam turbine having a capacity of 261MW and associated equipment.
Site for the proposed power plant is located within the premises of the existing Guddu power plant complex in Kashmore district of Sindh. The existing plant includes 640MW steam turbine units consisting of two 110 MW units and two 210 MW units, 600 MW combined cycle plant and 415 MW combine cycle plant, making a total plant capacity of 1,655 MW.
The existing steam/combined cycle units have the facility of dual firing, i.e. gas and fuel oil. However, fuel oil is used only during interruptions in gas supply. There will be no additional gas required for this new 747 mw plant and the existing supply will be used for this additional generation.
An environmental impact assessment (EIA) of the proposed project has been conducted in accordance with the stipulations of Pakistan’s environmental laws and the environmental guidelines of the International Finance Corporation (IFC).
The power plant will help the government in coping with the increasing demand of electricity in the country. The installation of the power plant will further enhance the power supply to this area, make the supply more reliable and therefore improve the quality of service. The project will also create employment opportunities in the area.

Stock index gains 254 points on foreign buying

By:  Staff Reporter | April 05, 2012 | The Nation

KARACHI - Karachi stock market closed bullish amid renewed institutional and foreign interest lad by blue chip oil and banking stocks ahead of quarter end earning announcements due next week.
At Karachi stock market benchmark KSE-100 share index posted fresh gain of 254.22 points or 1.86 percent on Wednesday to close the day’s trading at 13,945.30 points as compared to 13,691.08 points of the previous day.
Higher global commodities, rising cement prices, expectations for stronger quarter end results, improvement in Pak-US relations played a catalyst role in bullish sentiments at KSE as investor expected early announcements on implementation of revised CGT regime, said Ahsan Mehanti stock analyst in hid analysis. 
KSE-Allshare index increased 176.51 points to stop the day at 9,780.09 points, KSE-30 share index added 216.53 points to finish the day at 12,272.53 points while the KMI-30 share index up 357.24 points to end the at 23,800.09 level.
Equity dealer said, in anticipation that Presidential order related to gain tax will be issued soon; investors took fresh positions at local bourses. Investor’s interest remained in the blue chip stocks as volumes climbed to Rs.9 billion. National Bank once again closed to its upper limit while HUB Power also gained 4.5pc on the rumours of resolution of their tax dispute with FBR.
Volume of business extended to 409,301 million shares up from 318,143 million shares a day earlier. In a total of 369 issues gainers held a strong lead over the loser 228 to 85 and 56 shares remain unchanged.
Lafarge Pakistan was the top traded company of the day with 30,369 million shares gained Re 0.29 to finish at Rs 5.11. it was followed by Azgard Nine added Re 0.74 to end at Rs 10.02 with 26,210 million shares, JS&Co with 25,243 million shares up by  Rs 1.06 to close at Rs 22.77, Hub Power Co.XD traded 23,349 million shares achieved Rs 1.56 to finish at Rs 38.00 and DGK Cement with 18,587 million shares gaining Re0.86 to close at Rs 38.62.
Rafhan MaizeXD and Bata (Pak) Ltd were the heaviest price gainer of the day increased by Rs 127 and Rs 28.68 while the top loser were led by Wyeth Pak Ltd.XD and Ismail Industries decreased by Rs 32.71 and Rs 3.86 respectively.

3-day CNG holidays for Punjab may continue during summer

By: Iftikhar Alam | April 04, 2012 | The Nation

LAHORE – Three-day gas holidays for Punjab’s CNG filling stations are likely to continue during whole summer while the relief of one more day is expected for the industrial units of the province within a month, TheNation has learnt.
The Sui Northern Gas Pipelines Limited (SNGPL) has recently decreased the gas holidays for Punjab’s industry from five days to three days in a week. Now it is expected that the industrial sector might get relief for one more day within a month.
“Keeping in view the importance of the sector and decrease in demand due to rise in temperature, the SNGPL may add gas supply for one more day to Punjab’s industry within a month,” said a high official of the SNGPL while talking to this scriber on Tuesday. Setting priorities, what the official said, according to the importance of the sectors, the Company’s management is also going to restore supply to two fertilizers from April 6 (Friday). The persisting gas supply to at least two power plants during whole the summer would also be ensured, he added. The SNGPL was supplying 116 million cubic feet gas per day to power plants for the generation of electricity for national grid, added the official.
SNGPL might change its gas load management plan for the filling stations in coming month as well. But the officials of the SNGPL said that they are not expecting gap between demand and supply. They said the ratio of conversion of public transport from diesel to CNG is increasing day by day due to high prices of POL prices. And conversion of vehicles from diesel to CNG, according to them, is another factor which is a hurdle in bridging some gap.
Currently, the Company is facing shortfall of about 370 million cubic feet per day (MMCFD) in its network, demand standing at 2,300MMCFD against the availability of 1,930MMCFD. The SNGPL officials predict that about 300MMCFD shortfall would continue in the system throughout the sizzling heat.

Stock market sheds 98 points as investors book profits

By:  Staff Reporter | April 03, 2012 | The Nation

KARACHI - Stocks closed lower at KSE on first day of business week after gaining 4pc last week. Investors preferred to book profits as a result KSE Index trimmed down by 0.9 per cent.
At Karachi stock market benchmark KSE-100 share index shed 98.44 points or 0.72 percent to finish the day’s trading at 13,663.32 points as compared to the 13,761.76 points of last working day on Friday.
Equity dealer at KSE observed that Dewan Cement and Lafrage Cement remained in the limelight as investors hoped that 2012 will bring a turnaround in their profits. JSCL after a substantial gain in last few weeks closed at lower limit. Lower than expected inflation numbers for March did not have any impact on market sentiments.
Trading took place in 362 stocks where loser out numbered the gainers 163 to 135 while the value of 64 stocks remained intact. Stock traded 315,368 million shares after opening at 413,941 million shares.
KSE-Allshare index fell 65.43 points to stop the day at 9,584.52 points, KSE-30 share index misplaced 88.12 points to close the session at 12,026.01 points while the KMI-30 share index loses 138.81 points to close the day at 23,433.16 level.
Protests amid hike in local POL prices, gas supply curtailment in fertilizer sector, law & order concerns in the city and concerns for delay in revised CGT regime played a catalyst role in bearish sentiments at KSE, said stock analyst Ahsan Mehanti.
Dewan Cement was the top traded company of the day with 34,293 million shares as it closed at Rs 4.97 after opening at Rs 21.76. Jahangir Siddiqi was on second position off by Rs 1.07 to close at Rs 20.69 with 30,280 million shares. It was followed by Lafarge Pakistan 25,190 million shares, JS Bank Ltd 22,239 million shares and Bankislami Pakistan with 15,343 million shares.
Biggest gainer of the day was UniLever Pak LtdXD gained Rs 75.80 to close at Rs 5676.80 followed by Sapphire Fiber up Rs 6.10 to close at Rs 128.21.
The heaviest loser of the day was Rafhan MaizeXD down by Rs 115.68 to close at Rs 2520.17 followed by Indus Dyeing shedding Rs 20.29 at Rs 385.58.
APP adds from Islamabad: Islamabad Stock Exchange (ISE) witnessed bearish trend on Monday as the ISE 10-index shed 34.13 points to close at 2787.75.
A total of 593,876 shares were traded, which were up by 264,959 shares when compared with previous day’s trading of 328,917 shares.
The share price of Unilever Pakistan increased by Rs 75.80 per share, while the share price of Oil and Gas Development decreased by Rs 3.12 per share.
Silkbank Limited, NIB Bank Limited and Maple Leaf Cement remained the top trading companies in Monday’s trading with 269,376, 100,000 and 81,000 shares respectively.

 

 

KSE gains 163 points

By:  Staff Reporter | March 28, 2012 | The Nation

KARACHI - Karachi equity market closed bullish led by second and third tier stocks. Across the board buying helped index close over 13,400 points level with good volumes.
At Karachi stock market benchmark KSE-100 share index gained 163 points to end the day at 13,449.73 points as compared to the 13,286.73 points of the previous session.
Ahsan Mehanti analyst at stock market said that improvement in Pak-US relations after PM meeting with US President in Seoul for joint efforts on nuclear safety played a catalyst role in bullish activity at KSE amid higher trades.  Concerns for law and order in the city and political noise affected sentiments amid consolidation during the trading session ahead of reformed CGT regime implementation from April 1, he added.
KSE-Allshare index added 121.27 points or 1.30 percent to stop the day at 9,441.22 points, KMI-30 share index enlarged 169.13 points or 1.46 percent to conclude the day at 11,738.04 points while the KMI-30 share index up 223.88 points or 0.99 percent to stop the day of the week at 22,883.93 levels.
Equity dealer observed that besides interest in low priced stocks, activity was seen in mid and big capped stocks also. NBP and DGKC closed at upper limit. Investors looked keen to invest in cement sector due to expectations of good earnings this year.  Market traded 352.783 million shares as compared the 278.010 million shares of the previous day. Gainer held a strong lead over the loser 204 to 113 while the values of 58 stocks not changed.
Active list was topped by WorldCall Telecom with 27.663 million shares as it closed at Rs 3.30 after opening at Rs 3.08 Followed by Azgard Nine, Fauji Cement, NIB Bank Limited and Lafarge Pakistan with turnover of 26.445 million, 24.275 million, 17.260 million and 16.545 million shares respectively.
Biggest gainer of the day was Nestle PakXD rising by Rs 114.58 to close at Rs 4476.41 followed by Indus Dyeing up Rs 18.43 to Rs 411.85.
The heaviest looser of the day was Colgate Palmolive down by Rs 45.13 at 857.48 followed by UniLever Pak LtdXD shedding Rs 19.00 at Rs 5681.00. 

Govt hopes to achieve Rs 1,952b revenue target

By: Imran Ali Kundi | March 24, 2012 | The Nation

ISLAMABAD - The government is optimistic that Federal Board of Revenue (FBR) will achieve the revenue collection target of Rs 1,952 billion set for the current financial year 2011-2012 owing to the higher oil prices that would increase the revenues of the tax department, official sources told The Nation.
Background discussions with officials of the FBR and Finance Ministry have revealed that revenue collection target of Rs 1952 billion would be achieved at the end of June 2012, as revenues showed impressive growth in the first eight months of the ongoing financial year against the same period last year. The Federal Board of Revenue has to collect Rs 829 billion in remaining four months (March-June) of the current fiscal year to meet the revenue collection target of Rs 1952 billion, as it has provisionally collected Rs1123 billion during the first eight months (July-February) period of ongoing fiscal year, reflecting an exceptional growth trend.
Sources said that soaring oil prices in the international market are helping the government to raise its taxes that could control the increasing budget deficit which is already on the higher side, 3.1 per cent of the GDP during the first seven months (July-January) of the present financial year. The government has to keep budget deficit at 4.7 per cent of the GDP during the ongoing fiscal year, which according to the International Monetary Fund (IMF) and State Bank of Pakistan is a challenging target. The IMF in its last report regarding Pakistan’s economy has projected that budget deficit could go to seven per cent of the GDP at the end of June 2012. 
On the other hand, the government is once again contemplating to increase the oil prices owing to the surge in international market.

High food prices send 3.5m Pakistanis below poverty line

By: Imran Ali Kundi | March 20, 2012 | The Nation

ISLAMABAD - Only ten percent increase in food prices pushes 3.5 million more Pakistanis into extreme poverty (earning below $1.25 a day), noted by Asian Development Bank (ADB) in its recent study report released on Monday.
According to new ADB report, a spike in the cost of food staples like rice and wheat could push tens of millions more people into extreme poverty in South Asia but food subsidies targeted at the very poorest in the region would help them cope with still-high prices.
The study says that a 10 per cent rise in prices could push almost 30 million more Indians and nearly 4 million more Bangladeshis into extreme poverty. Pakistan is also at risk, with the same price leap causing an additional 3.5 million more people to drop to or below the $1.25-a-day income mark. South Asia’s high population growth rates and the high number of people already living on or close to the extreme poverty line of $1.25 a day mean it is one of the most vulnerable regions in the world to food price shocks.  Spending on food already accounts for half the total budget of low-income households.
Major direct impact of persistent higher food prices also includes adverse impact on growth as it reduces real income consumption, saving and investment. Interest rate tightening as policy response to control inflation would reduce aggregate demand and lead to further economic slowdown. Implementation of food subsidies and other social safety net programmes are likely to increase current expenditure and worsen fiscal deficit. In particular, Bhutan, Sri Lanka, India, Pakistan and Maldives already have relatively high fiscal deficits
“Subsidising the cost of a basic meal for the poorest and most vulnerable in places like India means the help goes to those who need it the most without putting an excessive burden on government finances,” said Hiranya Mukhopadhyay, an economist in ADB’s South Asia Department and an author of the report.
Nepal and Sri Lanka would be less affected, although a further surge in wheat prices would be painful for Sri Lanka, which is completely dependent on imports of the staple and has already seen historical high prices in recent years.
The report notes that after peaks in 2008 and 2011, prices of key food commodities have eased somewhat, although the rate of decline was slow in South Asia than international average. In addition, the region suffers from higher overall food inflation rates than the rest of developing Asia, with food making up a bigger share of items measured by consumer price index.
Short-term weather shocks and costlier oil account for some of past price upside but the study says rapid population growth, changing food consumption patterns linked to higher incomes and stagnating agricultural output are more critical factors driving rising food demand and inflation. Although governments in the region have taken steps to counter higher prices, some measures may not be helpful to neighbouring countries. India’s temporary food export restrictions, for example, could have had adverse impact on prices in neighbouring countries, as India is the world’s second largest rice producer.
Long term, governments must step up support for agricultural research to spark another “green revolution” to lift output and help develop crops more resistant to weather extremes. More investment in infrastructure, such as irrigation systems and farm-to-market roads to improve distribution and reduce post harvest losses is also essential.
Strengthening home-grown initiatives such as food bank established in 2008 by South Asian Association for Regional Cooperation may also help to smooth out price volatility and improve food security in South Asian region during times of shortage, the report added.

Pakistan’s education situation might be ‘disastrous’, but not hopeless

By Noman Ahmed

Published: March 17, 2012  The Express Tribune

Not all the blame goes to Pakistan, says the British high commissioner.

KARACHI:  The transformation of the education sector is necessary to save Pakistan’s future, said the British High Commissioner to Pakistan, Adam Thomson, in his keynote speech to the national body of the English Speaking Union (ESUP) on Thursday.

The event was organised by the union’s president, Barrister Shahida Jamil, and its vice president, Byram D Avari, at the Beach Luxury Hotel. While speaking on ‘Pakistan’s Education Emergency: Failing a Country’, Thomson described the educational reform a ‘panacea’ or cure-all remedy for most of the challenges.
Primary school enrollment in Pakistan is merely 56 per cent in contrast to the average global primary enrollment which has gone beyond 87 per cent. “Seventeen million Pakistani children who qualify as primary school students are not enrolled in any institution,” he said. The current situation of education is “disastrous”, said Thomson. This is an alarming figure as it is equivalent to the entire population of the megacity Karachi.
“It is now too late for Pakistan to meet the target,” said Thomson, referring to Pakistan’s “failure” to meet Millennium Development Goal 2 of achieving universal primary education by 2015.
Not putting all the blame on Pakistan, Thomson pointed the finger at the international community that failed the country. “We focused on short-term security issues and not on medium-term and long-term projects that would erase unemployment by strengthening the education sector.”
He informed the audience that the United Kingdom, after analysing the scope of disaster, has decided to help the country. “By 2015, we will help support the education of around four million children, train at least 90,000 teachers and provide funds for six million textbooks, at a cost of hundred billion rupees.” The United Kingdom is also helping rebuild schools in Khyber Pakhtunkhwa that were destroyed either by militants or floods. “We [the British] cannot flourish if you do not flourish and you’ll never flourish without giving priority to education.”
He cited Mohamamd Ali Jinnah in his speech, “Education is a matter of life and death for Pakistan”, and reminded the audience that through the 18th Constitutional Amendment, education is not a privilege but the right of every citizen.
Thomson admitted, however, that Pakistan is three times bigger than his country and the United Kingdom’s contribution and support would hardly reach 1 per cent of Pakistan’s GDP.
“The problems of such a large-scale country can only be fixed by itself,” he said while insisting that education reform is possible. He shared the example of Brazil where the literacy rate in a province among eight-year-old children jumped to 73 per cent from 43 per cent within three years.
Thomson praised the initiatives taken by the Punjab chief minister more than once and said that a number of projects initiated by him have started producing results.
Of every ten children not in schools around the planet, one is a Pakistani, he added. “The country is not only failing its present but its future as well.”
Published in The Express Tribune, March 17^th, 2012.

Pakistan ‘agrees’ to restore Nato supplies

By: Agencies | 18 minutes ago | The Nation

The civilian and military leadership has agreed in principle to revive normal relations with US-led forces in Afghanistan and restore Nato supplies through its land. Senior US officials in Washington also say they have been informed by Pakistani authorities that a high-level meeting in Islamabad on Wednesday agreed in principle to restore supplies for NATO forces. President Asif Ali Zardari presided over the meeting and was attended by Prime Minister Yousuf Raza Gilani, Foreign Minister Hina Rabbani Khar, Chief of Army Staff (COAS) General Ashfaq Parvez Kayani Air Chief Marshal Qamar Suleman and DG ISI Lt Gen Ahmed Shuja Pasha. Senior coalition leaders including Chaudhry Pervaiz Elahi, the ANP Chief Asfandyar Wali Khan and MQM leader Farooq Sattar were also attending the meeting. The rare meeting of the country’s top civilian and military leadership as well as key allies was called just days ahead of the joint session of the parliament that will mark the new parliamentary year but will mainly focus on the debate on the future relationship with the US and NATO allies. Although the government spokesmen told the media that the meeting reiterated the government’s earlier stance that the parliament will take decision on the NATO supply and relationship with the US, the leaders agreed to restore land route for NATO and revive normal ties with the US. Senior US officials in Washington said they have been conveyed after the Islamabad meeting about the decisions. In return the U.S. will also allow the equipments delivery to Pakistan which had been blocked after Islamabad blocked NATO supply line in November. Pakistan blocked supplies for nearly 150,000 NATO troops in Afghanistan as protest against the air strikes by the American fighter jets and helicopters in Muhmand triabl region and killed 24 soldiers. Pakistan had also vacated the key Shamsi airbase from the US army and had boycotted the Bonn conference on Afghanistan as a protest. Pakistan had also refused to welcome top US military leaders and diplomats until parliamentary review is completed, which had also been delayed for some time. But the meeting also decided to receive the top US visitors whenever they want to visit Pakistan and they agreed with the proposed visit of the US Centcom chief General Mathis, who is likely to visit later this month.

Chinese bank ditches Iran gas project

Khaleeq Kiani | Front Page | From the Newspaper

- File Photo

ISLAMABAD: A consortium led by the Industrial and Commercial Bank of China (ICBC) has ‘run away’ from providing financial advisory services for the Iran-Pakistan gas pipeline project apparently because of the US opposition to the plan and forced the government to look for alternative financing options.
“It is apprehended that a probable reason for not signing the agreement (to act as financial adviser for the project) till date could be geopolitical situation in the region,” a summary presented to the Economic Coordination Committee (ECC) of the cabinet on Tuesday said.
A meeting of the ECC presided over by Finance Minister Dr Abdul Hafeez Shaikh was informed by Petroleum Secretary Mohammad Ejaz Chaudhry that the Chinese consortium’s leader had “run away from the project”.
It was informed that on the directives of decision-making forums, “a top class financial adviser had been appointed through international competitive bidding following procurement rules”.
The contract with Habib Bank and Ernst & Young Ford Rhodes Sidat Hyder (EYFRSH) — two other members of the advisory consortium — had been signed by Inter-State gas Systems (ISGS), a state owned company, in the first week of January but the ICBC had been delaying the signing of a formal agreement. Now, the HBL and the EYFRSH were also not giving a clear response, the meeting was informed.
“The petroleum ministry informed that the existing parties of the ICBC and HBL are showing less interest in the IP project, so the ECC may go for other options,” an official statement issued after the meeting said.
The ‘front-end engineering design’ feasibility and a detailed route survey are being done by a consortium comprising the ILF of China and Nespak and are expected to be completed by June, on the basis of which bids will be invited for the 800km pipeline inside Pakistan for an engineering, procurement and construction (EPC) contract at an estimated cost of $1.5 billion.
The project involves a debt-equity ratio of 70:30 with the government having a majority share in equity.
Tender documents have been issued to pipeline suppliers and EPC contractors so that the contracts can be executed by the third quarter of this year. The contracts will form a major portion of the funding requirement for the project.
It has been proposed that as an alternative to the arrangement with the Chinese bank, the government should route the Infrastructure Development Cess recently imposed on gas consumers to Pakistani banks who should then create a fund with the government. The funding can be routed to the ISGS to meet financial requirements of the project that would help reduce the tariff for imported gas. Initial estimates suggest that the cess will be sufficient to meet the project’s funding requirements.
The ECC was requested to allow cancellation of the ICBC contract and to approach the second bidder, comprising the United Bank, Burj Capital Pakistan, Eco Trade Development Bank, Fieldstone Group and Islamic Corporation for Development of Private Sector, to sign a contract to provide debt and private equity for the project on similar terms.
The committee was also urged to consider government-to-government offers from China, Russia and Iran for providing funds for the project.
Iran has offered $300 million and Russia has offered to provide funding if the EPC contract is given to its companies without bidding. To accept the options, the government will have to bypass the Public Procurement Regulatory Authority’s rules.
The ECC constituted a committee comprising ministers for petroleum and water and power, State Bank governor, deputy chairman of the Planning Commission and secretaries of economic affairs, finance and petroleum to prepare recommendations within four days so that work on laying the pipeline could be started by September to meet the completion deadline of December 2014.
FERTILISER PRICE: The ECC approved a 23 per cent increase in the price of fertiliser for farmers from Rs1,300 to Rs1,600 per 50kg bag.
The committee allowed the Pakistan Agricultural Storage and Services Corporation to offload 450,000 tons of wheat — of the 1.28 million tons of stock — at Rs950 per 40kg to private parties and millers for which the government will provide a subsidy of Rs4.5 billion.
The meeting was informed that Iran had offered to purchase one million tons of wheat under a barter deal in return for fertiliser and iron ore, but was asking for fresh crop to be harvested from April 1.
RAILWAY LOAN: The ECC approved a Rs6.1 billion loan from commercial banks led by the National Bank to the railways on government guarantee for the repair of 96 locomotives.

Under observance: SBP orders review of charities’ accounts

Published: March 13, 2012  The Express Tribune

Financial institutions have been asked to conduct ‘enhanced’ due diligence to ensure legality of account transactions.

KARACHI:  In a sudden move, the central bank has issued fresh instructions to financial institutions to maintain strict vigilance over non-governmental organisations (NGOs) and charities – and ordered that a complete review of all such organisations’ accounts be undertaken and completed before the end of this financial year.

Financial institutions have been warned that failure to follow the new guidelines over the financial activities of these organisations would result in legal action by the banking authorities.
The State Bank of Pakistan (SBP) on Monday issued a policy and regulations circular regarding financial institutions’ required compliance to new guidelines in order to “protect” them from the risks of money laundering and terrorist financing activities.
The regulations are binding on all financial institutions under the Banking Companies Ordinance 1962. The institutions have been warned of “appropriate legal action” in case of non-compliance.
In accordance with the SBP’s Banking Policy and Regulations Department Circular No4 (2012), banks and development financial institutions (DFIs) have been instructed to conduct “enhanced due diligence” and obtain senior management approval prior to establishing a relationship with any NGO or not-for-profit organisation (NPO) or charities. Institutions will also be required to ensure that all transactions related to such accounts comply with the stated objectives of their operating entities.
All financial institutions are further required to open accounts only in the name of the relevant NGO or NPO, as per the title given in the documents submitted by the entity. Those authorised to operate these accounts, along with members of the governing body of the applicant organisation, will be subject to Customer Due Diligence and scrutinised for any involvement in proscribed organisations or relationship to suspicious individuals. All NGOs and NPOs – and their operatives – will be reviewed for any involvement in suspicious activities by June 30, 2012, and reported for legal action if required, according to the circular.
Furthermore, in case an organisation advertises its account number for soliciting donations or similar purposes, financial institutions are required to immediately flag the account and file a Suspicious Transaction Report if necessary in the condition that the advertising party’s account title is not found to be in correspondence to the account number publicised.
In addition, the circular notifies that personal accounts can no longer be used legally to collect charity or donations.
The circular also details documentary requirements that NGOs and NPOs must fulfill in order to be able to avail the services of financial institutions.
The new guidelines require financial institutions to finalise arrangements by mid-April for training programmes to be used in the education of staff so that all operatives may be able to recognise and thwart any illegal use of the financial services.
Published in The Express Tribune, March 13^th, 2012.

President signs bill to strengthen State Bank

From the Newspaper | Business

12 March 2012 

The Amendment empowers the State Bank to purchase, hold and sell currencies and instruments, including indices and derivatives, issued by governments, agencies, local authorities, corporate and supranational in countries whose currency has been declared as approved foreign exchange. - File photo

ISLAMABAD: President Asif Ali Zardari on Saturday gave assent to the State Bank of Pakistan (Amendment) Bill, 2012 to strengthen power of the central board of the State Bank to formulate and implement monitory policy and control government borrowing.
The Bill was passed by the National Assembly on Nov 4, 2010, and subsequently introduced in the Senate. It was passed by the Senate in May last with amendments. It was again passed by the National Assembly last month with the amendment made by the Senate.Farhatullah Babar, spokesman for the president, said that under the Amendment Bill, SBP may require banks or financial institutions to hold minimum reserves on deposit accounts with the bank in pursuance of its monetary policy objectives.
Powers of the federal government to supersede the central board have also been withdrawn, he said.
A new sub-section in the Bill says, “the Bank, the members of the Central Board or the staff of the Bank shall not take instructions from any other person or entity, including government or quasi-government entities.
The autonomy of the Bank shall be respected at all times and no person or entity shall seek to influence the members of the Central Board and Monetary Policy Committee or the staff of the Bank in the performances of their functions or interfere in the activities of the Bank.”
Power of the Central Board to formulate and implement Monetary Policy has been strengthened by adding two eminent monetary economists with sufficient research and teaching experience.
For the purpose of regulating the monetary and credit system, SBP may issue certificates of deposit and new instruments, including those that are Shariah compliant.
Under the Amendment, government borrowing shall be brought to zero at the end of each quarter barring the ways and means limit should be determined by the Central Board from time to time.
The debt of the federal government owed to the Bank as on the April 30, 2011, shall be retired not later than eight years from that date.
If any of the provisions about government borrowing are not observed by the federal government, the Finance Minister shall place before the Parliament a statement giving detailed jurisdiction for the said failure.
The Amendment empowers the State Bank to purchase, hold and sell currencies and instruments, including indices and derivatives, issued by governments, agencies, local authorities, corporate and supranational in countries whose currency has been declared as approved foreign exchange.—APP