$2bn Saudi deposits: Pakistan to pay 4pc annual profit

According to reliable sources, Pakistan would pay Saudi Arabia a 4% annual profit on $ 2 billion in deposits with the State Bank of Pakistan (SBP) for a one-year period.

According to sources, Saudi Arabia agreed to deposit $ 2 billion to meet one of the International Monetary Fund’s (IMF) preconditions, in which Pakistan was required to arrange foreign funding of up to $ 6 billion.

The UAE also announced to the IMF that it will deposit $1 billion with the State Bank of Pakistan.

On May 10, 2023, the Finance Division informed the Federal Cabinet via an additional agenda item that the Kingdom of Saudi Arabia, through its Ministry of Finance, had agreed to deposit $ 2 billion with the State Bank of Pakistan for a one-year period. The proposed annual profit rate was 4%.

According to the sources, the draught Deposit Agreement shared by the Saudi side has been forwarded to the Ministry of Law and Justice and the Office of the Attorney General for Pakistan for vetting and clearance in light of the May 14, 2019, Cabinet decision.

According to sources, the State Bank of Pakistan will be authorised by the Finance Division of the Government of Pakistan to enter into the Deposit Agreement if approved by the Federal Cabinet. The drafted Agreement had been approved by the Ministry of Law and Justice, subject to the completion of all code requirements, and the FBR had given its approval for tax exemption.

In accordance with Rule 16(1Xd) of the Rules of Business, L973, read with the remarks of the Office of the Attorney General for Pakistan, the Finance Division requested Cabinet approval for the Deposit Agreement and the Authorization Letter.

Following a brief discussion, the Cabinet approved the summary headed ‘Deposit Agreement between the Kingdom of Saudi Arabia (through the Ministry of Finance) and the Islamic Republic of Pakistan (via the State Bank of Pakistan (SBP) of May 10, 2023,’ submitted by the Finance Division.

The Cabinet Division was authorized by the Cabinet to issue the decision in the instant matter without waiting for official approval of the minutes.

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