March 27, 2007	Tuesday	Rabi-ul-Awwal 7, 1428

KARACHI, March 26: The State Bank has increased the foreign exchange exposure limits of banks from 10 per cent to 15 per cent of their paid-up capital. Earlier, the aggregate foreign exchange exposure limit of scheduled banks was set as 10 per cent of their paid-up capital, under which they were asked to conduct their foreign exchange operations.

To further enhance the capacity of authorised dealers in order to manage increased volume of forex market and to match future demand in the wake of growth in trade volumes, it has been decided to revise the foreign exchange exposure limit from April 2, 2007, said a State Bank release issued on Monday.

Accordingly, new aggregate foreign exchange exposure limit of scheduled banks would now be calculated as 15 per cent of their paid-up capital, with a maximum cap of Rs1,500 million.

The assigned capital required to be maintained by branches of foreign banks in Pakistan will be deemed paid-up capital for the purpose of this circular.

In the case of banks incorporated in Pakistan, the limit would cover all the branches, including overseas branches if any.

The guidelines for calculating the exposure limit would remain unchanged.

In case of increase in paid-up capital of a bank, it may apply for the enhancement of its exposure limit to the State Bank of Pakistan.