KARACHI: The State Bank has issued a clarification on a report published in Dawn on March 13 about the lowering of the private sector credit target to Rs50 billion from Rs94 billion projected initially in the annual credit plan for 2002-03.

“The report is incorrect,” says the clarification.

“It is clarified that the National Credit Consultative Council in its mid-term meeting held in Karachi on February 23 to review the monetary and credit developments during the first half of the current fiscal year had allowed the banks to advance the credit to the private sector to meet its demand fully. Therefore, there is no limit for extending credit to the private sector. The only binding limit is on government borrowings.”

Our Staff Reporter Replies: That private sector credit target is indicative in nature — and is therefore not binding on banks — is a known fact. That is why National Credit Consultative Council finds it fit to ask banks to meet the private sector credit demand fully. But private sector credit being a component of the monetary assets has to be projected. Initially National Credit Consultative Council had projected private sector credit at Rs94 billion for fiscal 2002- 03. That projection has now been lowered to Rs50 billion after the review of the monetary developments.