Big institutions visit markup rate more frequently

Big institutions visit markup rate more frequently

KARACHI: HSBC Bank Middle East-Pakistan, JS Bank, the Bank of Punjab and the National Bank of Pakistan topped the list as the central bank Wednesday made public its data of the individual institutions having visited the regulator’s interest rate corridor during the last quarter.

The central bank Wednesday declared to have decided to make public an additional report titled “Bank-Wise Access to Overnight Repo/Reverse Repo Facilities on Quarterly Basis” on its website. According to SBP data, during the second quarter of current fiscal year, Oct-Dec FY13, some 36 banks and investment firms had accessed its interest rate corridor 163 times. This number is reduced by 152 when compared to first quarter, July-Sep FY13, which saw individual institutions availing the SBP facility 315 times.

According to the regulator, during the just-concluded quarter each of the HSBC Bank, JS Bank and the Bank of Punjab accessed the interest rate corridor 9 times while the NBP availed it 8 times.Others to follow are the KASB Bank 7 times, Bank of Khyber 7, Citibank 6, Pak Kuwait Investment Company 6, SAMBA Bank 6, 5 each of the Barclays Bank, Deutsche Bank, Habib Metropolitan Bank, Saudi Pak Industrial and Agricultural Investment Company, Sindh Bank, Soneri Bank, Summit Bank, United Bank Limited, 4 each of the Allied Bank, Askari Bank, First Women Bank, Industrial & Commercial Bank of China, NIB Bank, PAIR Investment Company, Pak Oman Investment Company, 3 each of the Bank Al-Falah Limited, Bank Al-Habib, Faysal Bank, Habib Bank Limited, Pak Libya Holding Co, Bank of Tokyo-Mitsubishi UFJ, two each of the Industrial Development Bank, MCB Bank, Pak-China Investment Company and Silkbank and Standard Chartered Bank.

Pak Brunei Investment Company was the only entity that did not access the SBP’s interest rate corridor during the quarter in review. The investment company however had availed the facility 15 times during the first quarter.The State Bank said online publication of the report would provide the market with details of number of times the individual institutions had accessed the SBP’s interest rate corridor during the preceding quarter. The banks have already been given flexibility, through DMMD Circular Number 21 issued on October 5 last year, with enhancement of reserves maintenance period to two weeks and reduction in daily minimum Cash Reserve Requirement (CRR) to 3.0 percent.

“Hence, (the) SBP believes that broadcasting of this data would promote transparency and encourage banks and DFIs to improve their liquidity management practices and ensure smooth functioning of the interest rate corridor,” said the regulator.It may be pointed out that the Domestic Markets and Monetary Management Department (DMMD) of the State Bank currently publishes consolidated and bank-wise weekly reports on the Excess Cash Reserves (ECR) held by the banks over and above the required CRR on SBP website.

“The objective of publishing these reports was to bring more efficiency in the money market operations of the banks and to improve banks/DFIs’ own liquidity management, which have implications on SBP’s monetary operations,” said the central bank. In addition to these reports, the DMMD also was disseminating data of consolidated access to SBP Repo/Reverse Repo facilities by the institutions on daily basis, for maintaining transparency of the SBP’s money market operations, it said.