Academy of Chartered Bankers

Banks disbursed Rs598.3 billion in agricultural credit almost meeting the target of Rs600bn set during 2015-16.

Pakistan’s mango exports in the current season have so far crossed 80,000 tons, up 36% compared to the same period of last year, according to data of the All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association (PFVA).

Federal Minister for Science and Technology Rana Tanveer Hussain said the Pak-China Science, Technology, Commerce and Logistic Park would be established in Islamabad at the cost of $1.5 billion. He said that the foundation stone of the project is expected to be laid in March next year and it would be completed in ten years in three phases.

The weighted average banking spread clocked up at 5.12% in the first month of 2016, which marks the lowest level in the last 11 years. The banking spread, which is the difference between average lending and deposit rates, shrank by 67 basis points in January on a year-on-year (YoY) basis, according to the State Bank of Pakistan.

The asset base of the banking sector registered a quarter-on-quarter increase of 4.6% in the last three months of 2015, according to the Quarterly Performance Review (QPR) of the Banking Sector for October-December 2015 released by the State Bank of Pakistan (SBP) on Thursday. An increase of 7.8% in private-sector advances, including both seasonal and for fixed investment, and a moderate rise in the banks’ investment in sovereign papers were the major contributors to this increase in assets.

The government has extended a tax amnesty scheme which, aimed at attracting one million traders, could only attract 350 by its Feb 29 deadline. The deadline for the Voluntary Tax Compliance Scheme (VTCS) has now been put back to March 15. The amount of tax collected so far under the scheme is said to be around Rs40 million. The government has also raised the withholding tax (WHT) on banking transactions exceeding Rs50,000 a day from 0.3 per cent to 0.4pc. In the latest budget, a WHT of 0.6pc was imposed on non-filers of tax returns; it was later lowered to 0.3pc.

Annual inflation rose to 4% in February 2016 from 3.3pc in the preceding month, the average inflation for July-February 2015-16 stood at 2.48pc. The Consumer Price Index (CPI), used to measure prices of 481 commodities, has been witnessing an upward trend since November 2015. Prices of non-perishable and perishable products increased by 2.8pc and 2.42pc month-on-month in February 2016. One of the reasons for the surge in inflation was the introduction of Rs40 billion new taxes on import of processed food and other items.

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Pakistan, China divided over tax exemptions as differences persist between China and Pakistan over Beijing’s demand to grant tax exemptions to its commercial banks on income they will earn by extending loans under the $46 billion investment package, which Islamabad estimates may cost at least $2 billion in revenues. Under the November 2014 CPEC Energy Projects Cooperation Agreement, both the countries were bound to settle the issue of tax exemptions within six months of signing the agreement, according to official documents.

The national economic growth had jumped up to above five percent this year from last year's 4.24% and healthy economic indicators suggested it would soon reach 6-7 percent mark.

Overseas Pakistanis sent remittances amounting to $12.7 billion in July-February, which translates into a year-on-year (YoY) increase of 6%, according to data released by the State Bank of Pakistan (SBP). Remittances amounted to almost $12 billion in the same eight months of the preceding fiscal year. Pakistanis based in foreign countries sent home $18.4 billion in the fiscal year 2014-15, which translated into a YoY increase of 16.5%.

The State Bank of Pakistan (SBP) is expanding the issuance of local currency Islamic bonds (Sukuk), auctioning Rs100 billion ($955 million) worth of three-year paper this week, a much-needed tool for the fast-growing Islamic banking sector. The central bank plans to offer another Rs100 billion worth of Sukuk in April, according to its auction calendar. If successful, the two auctions would exceed the total amount of Sukuk the central bank has sold in the previous three-year period.