September 13, 2003	Saturday	Rajab 15, 1424

KARACHI, Sept 12: Banks are no more required to report to the State Bank the rates of profit being paid on foreign currency accounts.

The State Bank on Friday informed the banks of this decision through a letter. The central bank had required the banks to report to it the rates of return on foreign currency accounts in October 1998 after many banks had stopped paying any return on such deposits in the wake of freezing of foreign currency accounts in May 1998. The account holders had moved courts and got a verdict in their favour.

It was against this backdrop that the central bank had asked all banks to intimate it about the rates of return being paid on such deposits. The banks had then started paying nominal returns.

Senior bankers say the reason why the SBP has now discontinued this reporting is that almost the entire stock of frozen foreign currency bank accounts have either been encashed or converted into dollar bonds.

At end-July this year only $277 million worth of foreign currency accounts were

operational out of the total $11 billion frozen on May 28 1998 — the day Pakistan went nuclear in tit-for-tat response to Indian nuclear blasts on May 11.