Pakistan: Easypaisa Bank Gets First Digital Retail Bank License

In a landmark ceremony held at the State Bank of Pakistan (SBP) in Karachi, the Governor of central bank Jameel Ahmad, awarded the first Digital Retail Bank (DRB) license to Easypaisa Bank Limited (formerly Telenor Microfinance Bank Limited), authorizing it to commence commercial operations.

The DRB license to Easypaisa Bank is expected to promote innovation, enhance financial inclusion, and ensure the availability of accessible and affordable digital financial services. The event was attended by CEOs of digital banks, members of the Executive Committee of the Pakistan Banks’ Association, the Board of Directors and the senior management of Easypaisa Bank and senior executives of SBP.

Delivering the keynote address, the Governor underscored SBP's strategic role in establishing the framework for digital banking in Pakistan and facilitating the development of digital banks through a structured licensing process. He urged Easypaisa Bank to draw inspiration from its sponsor, Ant Group, by prioritizing the digital transformation of small and medium enterprises (SMEs) in Pakistan.

The Governor also highlighted the critical importance of achieving licensing milestones and encouraged digital banks to innovate and design customer-centric solutions tailored to the needs of individuals, micro, small, and medium enterprises (MSMEs), and other underserved segments. He emphasized that this focus would be instrumental in fostering financial inclusion and driving economic growth.

The Governor stressed upon the importance of addressing challenges associated with rapid technological advancements. He highlighted two critical areas of digital literacy of customers and cyber security measures to protect customer trust and ensure the integrity of the financial system.

He also expressed his confidence that, with the issuance of this license, Easypaisa Bank will prioritize the development of innovative, customer-focused, and affordable digital financial solutions, particularly for underserved and unserved segments of society. He emphasized that such efforts will play a pivotal role in advancing the financial inclusion and digitalization objectives.

In January 2023, SBP issued No Objection Certificates (NoCs) to five successful applicants: HugoBank Limited, KT Bank Pakistan Limited, Mashreq Bank Pakistan Limited, Raqami Islamic Digital Bank Limited, and Easypaisa Bank Limited.

These entities were selected following a rigorous evaluation process that assessed key criteria, including governance and fitness, industry expertise, financial capacity, business strategies, implementation frameworks, funding plans, and IT and cybersecurity infrastructure.

In September 2023, these banks received In-Principle Approval (IPA) to prepare for operational readiness. Subsequently, after fulfilling the required conditions, Easypaisa Bank Limited has now been authorized to commence commercial DRB operations.

The ceremony also featured remarks from the member of the Board of Directors of Easypaisa Bank who shared their vision and commitment to driving innovation in digital financial services. They expressed their gratitude to the State Bank of Pakistan for its support and reaffirmed their dedication to setting new benchmarks in customer-centricity and technological advancement in the financial sector.

 

 

German economy in deep crisis

The German economy is in deep crisis, with gross domestic product likely to contract 0.1% this year, the BDI industry association said on Tuesday, putting it on track for three years of declining growth for the first time since reunification.

At the same time, the euro zone will grow by 1.1% and the global economy by 3.2%, BDI said, indicating Germany will remain one of the currency bloc's laggards in economic terms.

"The situation is very serious, growth in industry in particular has suffered a structural break," BDI president Peter Leibinger said in Berlin. East and West Germany were reunited as a single sovereign state in the 1990s.

Increasing competition from abroad, high energy costs, still elevated interest rates and uncertain economic prospects have taken their toll on the Germany economy, which contracted in 2024 for two years in a row.

Disagreements over how to revive Europe's largest economy contributed to the governing coalition's demise, with the dire economic situation reflected in the storied auto industry as Volkswagen undertakes steep cost cuts to remain relevant.

The economic crisis is more than just a consequence of the pandemic and Russia's invasion of Ukraine, Leibinger said.

The problems are home-made and the result of a structural weakness since 2018 that governments have failed to tackle, Leibinger said.

"Public investment in modern infrastructure, in the transformation and the resilience of our economy, is urgently needed," Leibinger said, also calling for a reduction in bureaucracy, lower energy prices and a clear strategy for strengthening the German innovation and research landscape.

With a view to Brussels, Leibinger said it was important for Germany to take on a more confident leadership role again and for Europe to become more strategically independent.

The BDI president also addressed US President Donald Trump's return to the White House and his tariff threats, which could make the export-oriented German economy shrink by almost 0.5% in 2025 instead of the forecast 0.1% decline.

"The most important thing will be to enter into a transactional relationship and to have strategically important competencies that our partner can only find with us," Leibinger said.

 

Egypt and Jordan reject any attempt to move Palestinians out of Gaza

Egypt and Jordan have firmly rejected any attempt to move Palestinians out of their land, whether temporarily or permanently. The responses by the two countries came immediately after US President Donald Trump suggested Egypt and Jordan should take more Palestinians from Gaza. 

Egyptian foreign ministry expressed Cairo’s “continued support for the steadfastness of the Palestinian people on their land”.

The ministry rejected any infringement on those inalienable rights, whether by settlement or annexation of land, or by the depopulation of that land of its people through displacement, or encouraged transfer or the uprooting of Palestinians from their land, whether temporarily or long-term, France 24 reported.

Jordanian Foreign Minister Ayman Safadi said Amman’s rejection of any displacement of Palestinians is “firm and unwavering”.

Palestinian President Mahmud Abbas also condemned “any projects” to relocate the people of Gaza outside the territory.

Without naming the US leader, Abbas “expressed strong rejection and condemnation of any projects aimed at displacing our people from the Gaza Strip”, a statement from his office said, adding that the Palestinian people “will not abandon their land and holy sites”.

 

Big Oil not attracted by Trump mantra

According to Reuters, Wall Street expects US oil and gas companies to keep a lid on spending in 2025 and keep their focus on generating shareholder returns, despite calls by President Donald Trump to "drill, baby, drill."

Big Oil begins reporting fourth-quarter results this week, and outlooks for the coming year should reflect the dissonance between Trump's oil and gas-maximizing agenda and investor expectations. The industry has pushed in recent years to drive down costs and increase production by using more efficient technology rather than drilling many new wells.

Producers also must contend with lower global oil prices as the post-pandemic demand rebound runs its course and as China's economy struggles.

Benchmark Brent crude oil prices are projected to average US$74 per barrel in 2025, down from US$81 in 2024, according to the US Energy Information Administration.

Overall, for the US exploration and production sector, analysts at Scotiabank expect companies to target up to 5% production growth this year, and flat to slightly lower year-over-year capital expenditures.

The exception is Exxon Mobil, which plans a large increase in production. The largest US oil company intends to more than triple its production in the Permian, the top US shale field, and pump 1.3 million barrels per day from its lucrative operations in Guyana by 2030.

"We expect most oil and gas producers to remain disciplined with capital expenditures," said Rob Thummel, senior portfolio manager at Tortoise Capital. "However, less regulation will make it easier to increase drilling activity if commodity prices reach levels that are too high."

Chevron, which reports results on Friday, is expected to grow production by about 3% this year and in the mid-single digit percentage in 2026, said Barclays analysts in a research note.

The company has followed a conservative strategy, moving out of a phase of heavy investment in new projects, and is now generating cash, said analysts from RBC Capital Markets in a note. Chevron could also announce a dividend increase of at least 5% over the previous year.

Pakistan: Central bank cuts policy rate by 100bps

Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) on Monday January 27, 2025 in its meeting reduced the benchmark policy rate by 100bps to 12.00%.

The MPC stressed adopting a cautious approach noting that core inflation remains elevated, with high frequency indicators showing gradual improvement. The impact of 1,000bps reduction in the policy rate since June 2024 will continue to unfold, driving growth.

The committee also added that 1QFY25 GDP growth remained below expectations.

Tax collection during 1HFY25 also remained below the target.

Global oil prices remained volatile and that the global economic policy environment has become more uncertain.

Going forward, economic activity is expected to gain more traction with GDP growth for FY25 in the range of 2.5 to 3.5%.

Headline inflation for FY25 is now expected to average between 5.5 to 7.5%, subject to risks from volatile commodity prices, adjustment to energy prices, volatile food prices and impact of revenue measures.

On the fiscal front achieving the target for primary surplus would be challenging, while overall deficit is likely to come close to the target.

Outlook for the current account has improved considerably due to robust remittances. The current account balance for FY25 is anticipated to swing between a surplus and a deficit of 0.5% of GDP.

 

Can Trump force Egypt and Jordan to accept Gazans?

US President has suggested to move Gazans to Egypt and Gaza. It depends on how serious Trump is about the idea and how far he is prepared to go. Let us explore the likely outcomes.

One of Trump’s favorite economic tools impositions of new tariffs or outright sanctions that could be devastating for Jordan and Egypt. The two countries receive billions of dollars in American aid each year, and Egypt is already mired in an economic crisis.

Allowing an influx of refugees could also be destabilizing. Egypt says it is currently hosting some 9 million migrants, including refugees from Sudan’s civil war. Jordan, with a population of less than 12 million, is hosting over 700,000 refugees, mainly from Syria.

US pressure would also risk alienating key allies in the region with whom Trump has had good relations — not only el-Sissi and Jordan’s King Abdullah II, but the leaders of Saudi Arabia, Qatar and Turkey, all of whom support the Palestinian cause.

That would potentially complicate efforts to broker a historic agreement between Saudi Arabia and Israel to normalize relations, something Trump tried to do during his previous term and expects to complete in his current one.

Trump’s suggestion that Egypt and Jordan take in Palestinians from the war-ravaged Gaza Strip is likely to be met with a hard “no” from the two US allies and the Palestinians themselves who fear Israel would never allow them to return.

 “I’d rather get involved with some of the Arab nations, and build housing in a different location, where they can maybe live in peace for a change,” Trump said.

The idea is likely to be welcomed by Israel, where Prime Minister Benjamin Netanyahu’s far-right governing partners have long advocated what they describe as the voluntary migration of large numbers of Palestinians and the reestablishment of Jewish settlements in Gaza.

Human rights groups have already accused Israel of ethnic cleansing, which United Nations experts have defined as a policy designed by one ethnic or religious group to remove the civilian population of another group from certain areas “by violent and terror-inspiring means.”

History of Displacement

Before and during the 1948 war surrounding Israel’s creation, some 700,000 Palestinians — a majority of the prewar population — fled or were driven from their homes in what is now Israel, an event they commemorate as the Nakba — Arabic for catastrophe.

Israel refused to allow them to return because it would have resulted in a Palestinian majority within its borders. The refugees and their descendants now number around 6 million, with large communities in Gaza, where they make up the majority of the population, as well as the Israeli-occupied West Bank, Jordan, Lebanon and Syria.

In the 1967 Mideast war, when Israel seized the West Bank and Gaza Strip, 300,000 more Palestinians fled, mostly into Jordan.

The decades-old refugee crisis has been a major driver of the Israeli-Palestinian conflict and was one of the thorniest issues in peace talks that last broke down in 2009. The Palestinians claim a right of return, while Israel says they should be absorbed by surrounding Arab countries.

Many Palestinians view the latest war in Gaza, in which entire neighborhoods have been shelled to oblivion and 90% of the population of 2.3 million have been forced from their homes, as a new Nakba. They fear that if large numbers of Palestinians leave Gaza, then they too may never return.

Steadfastly remaining on one’s land is central to Palestinian culture, and was on vivid display in Gaza on Sunday, when thousands of people tried to return to the most heavily destroyed part of the territory.

Egypt and Jordan fiercely rejected the idea of accepting Gaza refugees early in the war, when it was floated by some Israeli officials.

Both countries have made peace with Israel but support the creation of a Palestinian state in the occupied West Bank, Gaza and east Jerusalem, territories Israel captured in the 1967 Mideast war. They fear that the permanent displacement of Gaza’s population could make that impossible.

Egyptian President Abdel Fattah el-Sissi has also warned of the security implications of transferring large numbers of Palestinians to Egypt’s Sinai Peninsula, bordering Gaza.

Hamas and other militant groups are deeply rooted in Palestinian society and are likely to move with the refugees, which would mean that future wars would be fought on Egyptian soil, something that could unravel the historic Camp David peace treaty, a cornerstone of regional stability.

“The peace which we have achieved would vanish from our hands,” el-Sissi said in October 2023, after Hamas’ attack on southern Israel triggered the war. “All for the sake of the idea of eliminating the Palestinian cause.”

That’s what happened in Lebanon in the 1970s, when Yasser Arafat’s Palestine Liberation Organization, the leading militant group of its time, transformed the country’s south into a launchpad for attacks on Israel.

The refugee crisis and the PLO’s actions helped push Lebanon into a 15-year civil war in 1975. Israel invaded twice and occupied southern Lebanon from 1982 until 2000.

Jordan, which clashed with the PLO and expelled it under similar circumstances in 1970, already hosts more than 2 million Palestinian refugees, the majority of whom have been granted citizenship.

Israeli ultranationalists have long suggested that Jordan be considered a Palestinian state so that Israel can keep the West Bank, which they view as the biblical heartland of the Jewish people. Jordan’s monarchy has vehemently rejected that scenario.

Trump proposes relocating Gazans to Egypt and Jordan

We have been saying over the years that the United States has been godfathering the ruling regime of Israel. We also wrote that whoever wins the US presidential election he/ she will condone war crime of Israeli ruling junta. The latest statement of US president Donald Trump that Egypt and Jordan must accept displaced Gazans is nothing but to handover the control of Gaza to Israel.

Trump on Saturday proposed relocating Palestinians from Gaza to neighboring countries, such as Egypt and Jordan, a suggestion that contrasts with the policy of the former Biden administration.

Speaking to reporters aboard Air Force One en route to Miami, Trump said he raised the issue during a telephone conversation with King Abdullah II of Jordan, reports Reuters.

He added that he planned to discuss the matter with Egyptian President Abdel-Fattah al-Sisi on Sunday.

"I told him [King Abdullah] that I'd like you to take on more because Gaza is a mess, a real mess," Trump said.

"I'd like Jordan to take people, and I'd like Egypt to take people. I’ll talk to Gen. Al-Sisi tomorrow. You're talking about a million and a half people. We just clean out that whole thing."

Trump described Gaza as "a demolition site," claiming, "Almost everything is destroyed, and people are dying there. I’d rather get involved with some Arab nations and build housing at a different location where they can live in peace for a change. It could be temporary or it could be long-term."

This relocation idea has drawn criticism, as the Biden administration had opposed similar proposals, emphasizing the importance of allowing Gazans to return to their homes in the context of a peace agreement and a two-state solution.

A ceasefire, in place since January 19, has brought temporary relief to civilians in the besieged enclave, but Trump expressed doubts about its sustainability.

"It's not our war; it's their war. I think they are very weakened on the other side," Trump told reporters in the Oval Office earlier in the week.

Commenting on the state of Gaza, Trump said, "I looked at a picture of Gaza. It’s like a massive demolition site. 

That place... it needs to be rebuilt differently. Gaza is a phenomenal location by the sea, with the best weather and great potential. Some beautiful things could be done with it, but it’s in ruins now."