Statutory liquidity requirement: Share of bonds increased
State Bank raises limit from 10% to 15% of banks’ time and demand liabilities.
KARACHI:
The State Bank of Pakistan (SBP) has increased eligibility limit for Pakistan Investment Bonds in statutory liquidity requirement (SLR) of banks from 10% to 15% of time and demand liabilities.
In October 2008, this limit was increased from 5% to 10% of time and demand liabilities.
However, the SBP said term finance certificates (TFCs) would not be used for maintaining SLR.
“The eligibility of TFCs for maintaining SLR notified on June 9, 2008 and June 22, 2010, stands cancelled and hence no TFC will be eligible for the purpose of maintaining SLR,” the SBP said in a circular sent to chief executive officers and presidents of banks on Friday.
The new directives will take effect immediately.
In terms of Section 29(1) of the Banking Companies Ordinance 1962, SLR means that every banking company will maintain in cash,
gold or approved securities valued at price which will not at the close of business in any day be less than such percentage of its total time and demand liabilities in Pakistan, as may be notified by the State Bank from time to time.
Published in The Express Tribune, November 5th, 2011.
The State Bank of Pakistan (SBP) has increased eligibility limit for Pakistan Investment Bonds in statutory liquidity requirement (SLR) of banks from 10% to 15% of time and demand liabilities.
In October 2008, this limit was increased from 5% to 10% of time and demand liabilities.
However, the SBP said term finance certificates (TFCs) would not be used for maintaining SLR.
“The eligibility of TFCs for maintaining SLR notified on June 9, 2008 and June 22, 2010, stands cancelled and hence no TFC will be eligible for the purpose of maintaining SLR,” the SBP said in a circular sent to chief executive officers and presidents of banks on Friday.
The new directives will take effect immediately.
In terms of Section 29(1) of the Banking Companies Ordinance 1962, SLR means that every banking company will maintain in cash,
gold or approved securities valued at price which will not at the close of business in any day be less than such percentage of its total time and demand liabilities in Pakistan, as may be notified by the State Bank from time to time.
Published in The Express Tribune, November 5th, 2011.