‘SBP, Iranian bank to sign agreement’

LAHORE: The State bank of Pakistan (SBP) and Central Bank of Iran (CBI) will sign a Banking and Payment Arrangement (PBA) agreement, which will allow Pakistani and Iranian exporters to settle their claims through the two state banks respectively.

The SBP governor Ashraf Mahmood Wathra said this during his visit to the Lahore Chamber of Commerce and Industry (LCCI) on Friday.  SBP governor said the PBA would help promote bilateral trade, after the economic sanctions on Iran were relaxed.

Earlier, the federal cabinet and the Cabinet Committee of Economic Coordination had already approved it, he said. Wathra said the agreement between SBP and CBI would boost mutual trade volume. He said in Pakistan and India, credit to GDP ratio is correlated to tax-to-GDP ratio, which is around 11 percent and 26 percent, respectively. He said credit to GDP ratio would simultaneously grow with increase in GDP.