Daily Times

KARACHI: The State Bank of Pakistan (SBP) is reviewing the working of foreign branches of Pakistani banks to ensure implementation of regulatory compliance in other countries so that no untoward incident takes place in the future, SBP Governor Tariq Bajwa said on Tuesday.

Addressing the participants of a meeting held at the Karachi Chamber of Commerce and Industry (KCCI), the SBP governor said that HBL was undertaking a departmental inquiry of the incident of its New York branch. He said that as a regulator, the SBP ensures that the banking sector complies with the Basil-III requirements, and that the business regime is gradually improving.

Responding to the question of KCCI officials about 100 percent cash margin requirement for imports of non-essential items, the SBP governor said that economic growth during the last year was encouraging which was also acknowledged by international agencies. However, there were some challenges too and to meet the challenges the decision of imposition of cash margin requirement was taken just to discourage import of non-essential goods, he said, assuring the participants that its pros and cons would be reviewed.

To a question about facilitation of tax collection to the business community of the city, Bajwa assured that the option of tax collection/stamp duty by banks other than NBP would also be reviewed.

He assured the business community that discussion with banks would be held to facilitate businesses on Saturdays and with evening bank facility. He also assured them of reviving the committee consisting of SBP and KCCI officials.

To a question about the lack of progress on the establishment of banking channels between Iran and Pakistan, the governor said that Pakistan had done its share of work and delay was on the Iranian side, as they had to nominate two representatives for the relevant committee.

Tariq Bajwa said that the central bank was giving priority to the less developed and underserved areas of the country. He said that the SBP had recently launched Refinance and Credit Guarantee Scheme for Women Entrepreneurs in Quetta. “Our major focus is on the development of the country’s SME sector, which has huge potential,” he responded.

He informed the participants that it was for the first time in the history that a scheme with 0% refinance rate and 60% risk coverage for small businesses run by women entrepreneurs had been rolled out. “Maximum financing amount under the scheme is Rs 1.5 million with a 5-year period, end user rate is 5%, which is locked in for financing period and 60% risk coverage is available against an outstanding principal.”

On shifting of some departments of the SBP to Lahore, the governor said that due to space constraints the decision was made, but the working would not be affected.

Earlier, KCCI President Shamim Ahmed Firpo and former president Siraj Qasim Teli along with other officials informed the SBP governor about the problems faced by the business community.

Published in Daily Times, August 30^th 2017.