Daily Times

Karachi: Arrangements for establishment of banking channels between Pakistan and Iran have been finalized and soon central banks of both countries will sign an accord, Governor State Bank of Pakistan (SBP), Ashraf Mehmood Wathra said here on Monday.

Addressing the members of Karachi Chamber of Commerce and Industry KCCI, the Governor said that to facilitate trade between Iran and Pakistan the Central Bank of Iran will facilitate Iranian businessmen while SBP will help Pakistan’s businessmen.

The Governor also informed the members that to enhance external trade the materialization of the concept of EXIM Bank is in advanced stages as Asian Development Bank’s technical assistance is being sought and adverts has been floated to fill the post of CEO.

The governor SBP also decided to continue with central bank’s decision of 100 percent cash margin on the imports of certain items including mobile phones and vehicles. “We talk too much about sacrifices but nobody is ready to sacrifice for the greater national cause. Members of some sector approach SBP for exclusion of their sectors and insist on the inclusion of other sector”, Wathra noted as he rejected the demand of withdrawal of 100 percent cash margin imposed by the central bank recently.

SBP governor also informed that for implementation of “Secure Payments Act” consultation was in progress with relevant bodies.

He informed that the central bank was focusing on to enhance financing to SME sector by providing them enabling environment which has increased to Rs 400 billion. The central bank has made financial inclusion its basic strategy, governor SBP said adding all the banks have been directed to provide financial services to the areas where such facilities are not available.

Central bank of also giving priority to promotion of branchless banking as only 9 service providers and more players are willing to step in provide mobile wallet system, Governor SBP said.

Talking about agriculture sector of the country, SBP governor said that efforts were underway to provide ‘formal farms credit’ to farmers. The credit off take to the agriculture sector has increased to Rs 598 billion by year 2016.

About growing Islamic Banking in Pakistan, Wathra said the assets of the Islamic Banking have increased to Rs 1.5 trillion which are expected to grow by 20 percent by 2020. However, the governor pointed out that the masses are unable to differentiate between Islamic banking and conventional banking

Governor SBP also informed the businessmen about the existence of many concession credit schemes which remained untapped mainly due to lack of knowledge.

The governor also stressed the need for changing current export mechanism/model which according to him was suitable for 1960s and 1970s but does not meet modern requirements. “New people are needed in the export sector as old are not willing to work hard”, he noted.

During the meeting with KCCI members the question about the authenticity of Rs 500 not was also raised to which central banks replied that the these banknotes carry state of the art security features, besides, change in size, design and color scheme. Later on another security feature, the color shifting flag made of Optical Variable Ink (OVI) was added to enhance the anti-counterfeiting resilience and ease in identification by the general public. This, however, resulted in availability of both types of Rs 500 banknotes viz issued during 2006-2009 without OVI, and issued w.e.f January 25, 2010 with OVI feature. The central bank further clarified for benefit of all concerned that new design banknotes of Rs 500, with and without OVI flag, are genuine provided all other security features are intact.

Earlier, Shamim Ahmed Firpo, President KCCI, Anjum Nisar, former President KCCI and Siraj Qasim Teli in their addresses highlighted the issues being faced by business community.