KARACHI, Oct 22: Governor State Bank of Pakistan (SBP) Dr Ishrat Hussain has assured sugar industry that the banks will consider rescheduling their loans sympathetically.

SBP Governor told Pakistan Sugar Mills Association (PSMA) here on Monday that he had conveyed the banks about the problems facing sugar industry, and they would be sympathetic.

He advised the sugar mills to contact their banks for rescheduling if they were facing cash flow problems.

Referring to the demand of PSMA chairman for help to sugar industry in rescheduling the loans, he said the SBP did not interfere in these matters and it was now the matter between borrowers and their banks.

Dr Ishrat Husain said that he had already conveyed the banks that the problems facing sugar industry are seasonal and they are aware of it.

“You must approach your banks for seeking help in your cash flows. I assure you banks will be very sympathetic to you,” SBP Governor said.

Referring to revolving credit scheme, he said industry can utilize this facility, which is valid for three years and the borrower can serve his loan comfortably.

To a query about bank’s refusal for rescheduling after court orders, he said specific cases can be referred to SBP for settlement.

He was of the view that it was in the interest of the bank to honour court orders for rescheduling of stuck-up loans.

Giving advice to the industry, Dr Ishrat said that industry must invest in research and development to improve its productivity, which was not satisfactory.

He said except in lower Sindh, Pakistan is not competitive in per acre yield and this is the matter of concern.

He pointed out that three out of four major crops including wheat, cotton and rice had shown that they were quite economical, but sugar was not.

Underlining the need for incentive and creation of feasible environment for sugar industry, the Governor said that the industry should also go for research to increase its efficiency and productivity.

“We need to move to higher productivity cycle in sugarcane production, sucrose content and have more efficient companies to get better production and profitability,” he observed.

He said the government was trying to keep a balance between consumers, sugar mills and the growers.

Referring to country’s economy, he said that appreciation in rupee value after September 11 scenario and fall in international oil prices has enabled SBP to cut discount rate by 2 per cent.

He said the inflation is also under control due to these factors as the cost of production has declined and import cost dropped.

He said that local banks will have to cut their mark up in the present scenario.

He was of the view that strong groups will get rate lower than discount rates.

He said due to efforts, the importing countries are not cancelling their orders while Exim Bank of USA has assured that it will confirm LCs opened against import of Pakistan goods.

He said higher cotton and wheat crop will help the country in the present circumstances.—APP