ISLAMABAD, June 30: The Securities and Exchange Commission of Pakistan (SECP) has prescribed certain conditions in addition to those imposed by the State Bank for the Non-Banking Finance Companies (NBFCs) interested to raise foreign currency deposits.
An official announcement issued here on Thursday said the NBFCs, before coming under the regulatory purview of the SECP in 2001, used to raise foreign currency despots after obtaining Restricted Foreign Exchange Licence (RFEL) from the SBP.
However, the additional conditions laid down by the SECP would further streamline the raising and utilization of the foreign currency deposits.
According to the SECP’s conditions the NBFCs raising foreign currency deposit shall maintain, in the currency of deposit, a minimum of 5 per cent of Cash Reserve Requirement (non-remunerative) and 15 per cent (remunerative as prescribed by the SBP for banks) of Special Cash Reserve Requirement of their total foreign currency despots with the SBP.
The subject minimum requirements would change as and when the SBP changed them for commercial banks.
NFBCs shall report their assets and liabilities (both on and off balance sheet) in foreign currency on fortnightly basis to the SECP on the first and 16th day of every month. The report should reach to the SECP within three working days subsequent to the reporting period.
Foreign currency deposits (FCDs) so raised shall be utilized for permissible activities like nester placements, foreign currency loans, trade financing, SWAP transactions and matched forward transactions.
Foreign currency deposits can also be invested in bonds/securities with minimum credit rating of BBS (Triple B).
