KARACHI, May 25: The State Bank has asked development finance institutions or DFIs to maintain statutory liquid reserves or SLR at 15 per cent of their total time and demand liabilities (deposits) from January 1, 2005.
At present they were maintaining SLR at 14 per cent. In addition to this all DFIs shall continue to maintain cash reserves (CR) at one per cent of their deposits.
A circular issued by Banking Supervision Department of the SBP said that for the purpose of calculating SLR and CR the time and demand liabilities or total deposits of DFIs shall be determined by excluding the following:
(i) Total equity including paid-up capital, reserve and unappropriated profit/ loss.
(ii) Borrowings from banks and DFIs.
(iii) Borrowing from the SBP.
(iv) Deposits from banks and DFIs.
All other liabilities shall be included in time and demand liabilities of DFIs for computing SLR and CR.
PIBs are eligible approved security for SLR purposes only to the extent of five per cent of the total time and demand liabilities. "However, keeping in view their current investment in PIBs, DFIs are allowed to report total investment in PIBs (held in their own account) as an approved security eligible for SLR up to December 31, 2005."
The circular requires all DFIs to furnish to the State Bank a weekly statement of liquidity position showing the details of the liquid assets and liabilities.
The rate of penalty in case of default in maintenance of SLR is Rs86 per Rs100,000. For calculating SLR the time and demand liabilities of DFIs would be calculated on weekly basis. DFIs are also required to maintain the prescribed level of SLR at the close of business on daily basis.
