ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has allowed the State Bank of Pakistan (SBP) to provide dividend at the rate of 10 percent to shareholders on the face value of its shares, official sources told Business Recorder.
On August 21, 2020, the Finance Division informed the ECC that the State Bank of Pakistan pays dividend to its shareholders as required under Section 42 of the SBP Act, 1956, which provides that: "after making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds, such other contingencies or appropriations as are usually provided for by Central Banks in matters respecting unrealized gains on foreign exchange reserves, properties, gold, long-term investments and other similar assets and certain losses directly charged to equity of the Bank, there shall be paid to the shareholders out of the net annual profit a dividend on the shares at a rate to be fixed by the federal government from time to time. Any surplus remaining thereafter shall be paid to the federal government.”
The meeting was apprised that in the past, the SBP has been making provision for dividend @ 10 percent on the face value of SBP shares in the Bank's annual accounts. The SBP has now requested for approval of the federal government to continue with the same rate. The SBP has proposed to fix the dividend @ 10 percent of the face value of shares.
The ECC considered the proposal of the SBP, tabled through the Finance Division and allowed it to provide dividend at the rate of 10 percent on the face value of SBP shares in the Bank's annual accounts for the year ended June 30, 2020.
Copyright Business Recorder, 2020
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