SBP chief promises friendly policy for industrial zones along CPEC

Asks banks to expand credit facility to KP businesses

PESHAWAR: The State Bank of Pakistan (SBP) Governor Ashraf Mahmood Wathra, on Monday said the central bank would devise a policy to cater to the needs of the industrial zones along the China-Pakistan Economic Corridor (CPEC) in all the four provinces.

He also asked the banks to adapt to the changing situation in Khyber Pakhtunkhwa that has improved over the last three years and expand credit facility to the businesses in the province.The SBP chief was talking to reporters at the end of a discussion session “Credit Expansion in KP-Discussion with banks and Chambers of Commerce” at a local hotel.

He said, “due to the security situation after years of terrorism the business community had reduced its activities, while banks had also withdrawn”. Today, we brought all the banks and chambers of commerce here to make them realise that situation has improved a lot and the banks should increase their activities and support the industry and Small and Medium Enterprise (SMEs) in the province.

About his meeting with the chief minister and demands of the province from the central bank, Ashraf Wathra said Chief Minister Pervez Khattak was also seeking exclusive financing policy for the industrial zones along the CPEC passing through the province.

However, he added that the SBP was working on a national policy for the purpose as the corridor would pass through all the four provinces and an overall policy would be worked out to cater to the industrial zones along the CPEC.

Ashraf Wathra maintained that after the efforts of the federal and provincial governments and measures taken during the operation Zarb-e-Azb, situation in Khyber Pakhtunkhwa had improved.

“As the situation has improved significantly and businesses are returning to normalcy, the banks should also enhance support to the businesses, particularly the small ones, in terms of availability of credit,” he added.

He urged the banks to acknowledge the changing business conditions of Khyber Pakhtunkhwa and accelerate the pace of credit expansion and other trade facilitation activities in the province.

Earlier, in his monologue, he said the share of Khyber Pakhtunkhwa in the banks’ deposits was 7.4 percent while the lending of the banks to the local businessmen was 1.3 percent that needed to be increased.He said the Advances to Deposit Ratio of banking industry was 48 percent in the country and in case of Khyber Pakhtunkhwa it was only 7.4 percent.

The SBP governor added that the unfavorable security situation in the province has adversely affected the overall economic environment that compelled the financial institutions to exercise extra prudence.

Besides, the low presence of large scale industries, relatively smaller size of urban centres and lower demand for financing checked the credit growth in the province, he said. Responding to the points raised by Khyber Pakhtunkhwa Chamber and Industry (KPCC) President Zulfiqar Ali Khan that banks had declared Khyber Pakhtunkhwa as “no-go” area for lending, Ashraf Wathra dispelled the impression that there was any red zone. He cautioned the banks against any such discrimination.

FPCCI President, Abdul Rauf Alam, sought revival of the advisory committee and inclusion of the chambers in the formulation of the policy regarding the CPEC. He also mentioned the potential opportunities in the wake of lifting of sanctions on Iran and sought SBP policy on the same.

Ashraf Wathra urged the banks to restore correspondent relationship and SWIFT code with eligible Iranian banks at the earliest to facilitate trade between the two brotherly countries.Chairman Pakistan Banking Association, Aftab Manzoor, Managing Director Bank of Khyber, Shamsul Qayyum, ex-president KPCCI Fuad Ishaq were among presidents and CEOs of 30 private banks and leading businessmen of province present at the discussion.Earlier, Wathra called on Governor Iqbal Zafar Jhagra and Chief Minister Pervez Khattak.