June 3, 2003	Tuesday	Rabi-us-Sani 2, 1424

KARACHI, June 2: The banks have made disbursement of Rs116 billion in the private sector during 10 months of current fiscal year, said Governor State Bank of Pakistan (SBP), Dr Ishrat Hussain here on Monday.

Addressing the members of Federation of Pakistan Chambers of Commerce & Industry (FPCCI), he said that as compared to this fiscal, the disbursement as credit to private sector during the preceding period was only Rs50 billion.

He said during the current fiscal, the manufacturing sector made significant progress and all the credit goes to the private sector. He said that over-invoicing or any fraud with the banks was not in the long term interest of the businessmen.

“You need to develop your credibility as an honest businessmen not only at domestic level but internationally as well,” he said. Dr. Ishrat said there was need to adopt policy of disclosure so that the foreign investor could himself approach the business houses.

He said the $10 billion export per annum was not a good figure, instead it should have been at 12 per cent per annum as was average of other economies the world over. About complaints made by businessmen that some banks were charging high interest rates, the governor said that it depended on the reputation of the client because the bank was also at the same time taking risk by lending money.

He dispelled the impression that no investment was coming in various segments of the economy and that no new investment was in sectors like sugar, cement, and fertilizer because these have reached saturated point.

“But investment is coming in oil and gas and even textile sector which imported machinery worth $2 billion since 1999,” he said and added that banks provided Rs63 billion to various value-added sectors in textile.

Referring to issues related to loan defaults, he said the wilful defaulters will have to face the consequences.

“No person has been targeted or approached by the banks or NAB without any reason. It is being done in transparent manner,” he said.

Dr. Ishrat said exchange rate was working under market mechanism. However, as elsewhere in the world, the central banks do intervene when required to keep the exchange rate stable.

The presidents of National Bank of Pakistan (NBP), Ali Reza and Habib Bank Ltd (HBL), Zakir Mehmood, earlier briefed the businessmen about the banking environment and facilities which could be availed by them.—APP