Professional Documents
Culture Documents
Products Overview
REPOs
Reverse REPOs Bills of Exchange
Instrument
Maturity
3M, 6M, 1Y
1 day to 1Y
Availability
Through coupon)
Primary
Dealers
Traded
in
Secondary
Yield
WHT
None
Zakat
Dr
Cr
Cr Cr
Bank Account-SBP Loss on sale of MTBs Investment Account-MTBs (Entry on sale of MTBs)
Dr Dr Cr
Instrument
Pakistan Bonds
Primary Market
Investment
Secondary Market
Maturity
Return/Coupons
Upto 30 years, however,3, 5, 7 & 10 years PIBs are more actively traded. Based on Yield to Maturity formula
Any time through PDs or secondary market Determined through trading in Money Market None
Availability
Price
Tax
None
Zakat
Outright sale of PIBs Bank Account-SBP Discount Account PIBs (if discount on PIBs) Loss on sale-PIBs (if loss on sale) Investment Account-PIBs Premium Account (if premium on PIBs) Interest receivable (if accrued income sold) Gain on sale-PIBs (if gain on sale) (Entry on sale of PIBs) Cr Cr Dr Cr Cr Dr Dr
Coupons Accrual Suspense A/C-Interest receivable I/A Interest income (Accrual on coupon booked) Dr Cr
Certificate of Investments/Deposits
Issued by the investment banks and leasing companies. Maturity: one month to five years. Interest rate is negotiated according to the rates prevailing in the market. The certificates are non-negotiable and non-transferable.
Cr
Accrual of Interest income Interest Receivable- TFCs Dr Interest income- TFCs Cr (Accrual for the interest income on the month end for the current month)
Redemption or interest received on TFCs Bank Account SBP Dr Interest Receivable- TFCs Cr I/A TFC Interest Cr Investment Account-TFCs Cr
Responsible Person
Designated officer(s) settlement Designated officer(s) settlement Designated officer(s) settlement
Written confirmations should be sent and obtained in order to regularize the transaction. Discrepancy, if any, should be rectified instantly. Payment made through the RTGS In case counterparty is not the member of RTGS, a SBP cheque of placement amount shall be prepared in favor of the borrowing bank and handed it over to the broker who facilitates the said transaction or directly to the counter-party as the case may be.
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Foreign Exchange
Ready Transaction
The Ready Deals are settled on the same day of the deal at a fixed agreed price.
Spot Transaction
Most of the foreign exchange transactions are being executed at a fixed agreed price on spot basis. By convention the value date of the spot transaction (the date on which cash flow happens) is two business days after the date of the deal.
Foreign Exchange
Forward Deals
In Forward deals, transaction is settled on the agreed future dates with a fixed agreed price according to the time duration (the date on which the transactions executed and value date) within which the transaction is to be executed.
Swap Deals
A swap is simultaneously selling and buying or vice versa of the same foreign currency with the same counter-party as single transaction with two different value dates at the agreed exchange rates. The banks contracts to pay and to receive the same (or nearly the same) amount of foreign currency, the difference in rates represents the interest differential of the foreign exchange currencies involved for the period of Swaps.
Foreign Exchange
Placements
This type of transaction is entered into, to avail profitability, excess balance of Nostro accounts by investing (placing) with other banks in order to earn interest. The rate of interest varies with international foreign exchange market various factors and the time period for which the amount has been placed.
Borrowings
This type of transaction is entered into to borrow funds from other banks to satisfy the short-term/long term need of foreign currency. The rate of interest varies with the international foreign exchange market various factors and the time period for which the amount has been borrowed. Fcy borrowing from abroad is allowed with special permission of SBP.
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Issuance of SBP cheque is also required as mode of payment to the counter-party (which are not the member of RTGS) from whom bank purchased the foreign currency. Prepare SBP cheque for payment
The authorized officers of the bank will sign the SBP cheque. The names of these officers are to be registered with the SBP for their record.
In case the deal is done with foreign bank operating outside the country wanting to replenish the fund in their account with Askari Bank limited then there is no need to issue SBP cheque since rupee funds have to be credited to the respective account maintained with AKBL.
If the foreign bank maintains account with another bank than issuance of SBP cheque is imperative.
This is a process by which a position or portfolio is revalued based on the current days closing price OR accounting for the fair value of an asset or liability based on its current market price.
Spot foreign currencies positions are revalued daily by using the revaluation rate. Profit and Loss are booked monthly. Forward FX are revalued daily by using present value methodology. Profit and Loss are booked monthly.
FX Types of Rates
Exchange Rate Bid/Ask Rate Forward Rate Intra Branches Sale/Purchase Rate Revaluation Rate Cross Rate Premium/Discount Rate
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