SBP to ask banks to accept property as collateral, KSE assured

KARACHI - State Bank of Pakistan Governor Shamshad Akhtar has assured the directors of Karachi Stock Exchange to direct the scheduled banks to accept the property and other tools as a collateral to lend money to the investors of share market in order to match the margin exposures.
Governor SBP has further assured the directors of KSE to do her utmost for resuming CFS lending, as the banks have halted the CFS lending, owing to concerns over the default of brokers.
The governor SBP said this in a meeting with the directors of KSE that called on her at SBP office on Saturday.
Sources said that directors of KSE met with the governor SBP and sought her assistance to deal with the toughest liquidity crisis in the stock, keeping in view about the expected panic selling after the removal of floor from October, 27, 2008.
Sources, who attended the meeting, said that a number of issues were discussed with the governor SBP and her team to highlight the areas where the SBP could support the stock market in order to reduce the concerns on liquidity related issues.
Sources said that response of governor SBP bank was highly positive and she had realized that stock markets were in great pain over the couple of months and the pain would go from bad to worse if there will be no immediate injection of substantial funds, especially before the removal of floor.
Sources said that they had requested the SBP governor to take rescue measure for the stock market, as she had taken for the banking sector to alleviate the liquidity crunch in the sector.
Sources said that liquidity crisis was the main issue of today’s meeting and there will be additional meetings with the SBP governor on coming Monday and Tuesday as well to chalk out a strategy to counter the threats that were being expected to emerge after the removal of floor.
APP adds: State Bank of Pakistan on Saturday accepted bids of Rs 5,448m during its Reverse Repo Open Market Operation (Injection) in Govt of Pakistan Market Treasury Bills and Pakistan Investment Bonds. This injection is of the two categories �" 07 Days and 14 Days. The rate of return was 12pc and 12.15pc respectively. The total amount offered was Rs 23,198m, says SBP statement here on Saturday.