Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

SBP governor for close liaison between banks, exporters to overcome threats to economy


July 4, 2020

FAISALABAD: Governor State Bank of Pakistan (SBP) Raza Baqir Friday said close liaison, better understanding and practical working ties between banks and exporters are imperative to overcome threats posed to global and national economy in the wake of the coronavirus crisis.

Addressing a zoom conference with President Faisalabad Chamber of Commerce & Industry (FCCI), he termed coronavirus pandemic as a blessing in disguise as instead of waiting for regular meetings now we could easily arrange zoom conferences to interact, discuss and resolve our issues of important nature. Baqir said realizing the criticality of corona lockdown, the SBP immediately announced a refinance scheme to avoid unemployment. “Similarly the policy rate has also been trimmed gradually to seven percent so that the liquidity problems of SME (Small and Medium Enterprises) sector could be resolved on top priority basis”, he told and added that these steps also paved the way for revival of the economy.

He said apprehensions of the business community, regarding these schemes and steps, were also dispelled by introducing necessary amendments.

However, steps are also being taken to improve the disbursement of loans by selected commercial banks, he maintained. To a question, the SBP Governor said refunds of DLTL would be immediately shifted to the accounts of the exporters on the receipt of foreign proceeds.

“This process should be completed positively within a period of one week”, he said. Baqir also assured to solve the problems of the local business community as early as possible.

Earlier, Rana Sikandar Azam Khan, President FCCI, thanked SPB Governor for extending the refinance scheme for another three months and cutting down the policy rate to 7 percent.

He said zoom conferences have provided them an opportunity to immediately discuss their issues with government departments concerned but he suggested a regular meeting with the Governor SBP to cultivate good and cordial relations between the two departments.

He mentioned problems being confronted by the business community due to Covid-19 lockdown and elimination of zero-rating scheme for five major export sectors and told that exporters are facing liquidity problems as their capital is unnecessarily piling up with the government kitty.

“In this situation, they have to borrow capital at high markup from the open market to manage their day-to-day affairs”, he said and added that it was adding to their cost of production.

He stressed the need for a foolproof automation system for tax refund.

He said that FBR has introduced a “Fully Automated Sales Tax Electronic Refund (FASTER) scheme.

The FCCI president said under the new system, the FBR issues sales tax refunds to exporters by electronically communicating Refund Payment Orders (RPOs) to the State Bank of Pakistan within 72 hours of submission of claim for onward advice to banks for credit into the claimants’ bank accounts.

He lamented that this timeline is not followed and exporters are facing multiple problems. He stressed the need to make this system practically efficient.

He further said that FBR, State Bank of Pakistan (SBP) and Pakistan Revenue Automation Limited (PRAL) should also interact more vigorously on the issue of electronic transfer of refunds.

He said in case the RPOs are difficult to mature, some banking instruments may be introduced for exporters to en-cash it to resolve their liquidity problem. He also demanded that the zero-rated regime of five major export sectors may be restored to settle their major issues.

He also mentioned problems in the payment to winner’s prize bonds and told that previously the payment was made instantly by SBP but with the change of procedure, SBP has entrusted this responsibility to commercial banks.

“The payments are now delayed by the commercial banks”, he said and demanded that the payment procedure of winner’s prize bonds may be made simple and easy. The zoon conference was also attended by

Saqib Majeed, Senior Vice President (SVP), Bilal Waheed Sheikh, FCCI Vice President, Rana Ikramullah, Habib Ahmad Gujjar, Engineer Babar Shahzad and Khadim Hussain Maan.