ISLAMABAD: The inter-ministerial committee set up by the government to review the Loans for Agriculture, Commercial and Industrial Purposes Act 1973’, with a view to enlarge the scope of the law, has proposed amendments for the provision of loans for other sectors also.

Minister for Privatisation Daniyal Aziz, heading the inter-ministerial committee, observed during the second meeting of the committee on Friday that the Act was restricted to the provision of loans to only agriculture sector, although the deposit base of the banks is fast growing.

There is a dire need for the financial institutions to extend the credit facilities to allied industries for a balanced economic growth and development in the country, he said.

He proposed to the banks for considering provision of credit on the basis of disposable income instead of using typical methodology.

Aziz called for enhancing the banking sector’s outreach in the rural areas in order to ensure easy access to credit facility for the people living in underprivileged areas of the country.

Representative of the National Bank of Pakistan informed the meeting that the total agriculture loan portfolio stood at Rs50 billion, whereas it was providing credit facilities to about 0.26m farmers across the country.

Representative of the Habib Bank Limited said that the bank lends Rs34bn to farmers under its agriculture loan programme at 11pc interest rate.

Representatives of financial institutions have appreciated the revamping of the Act and observed that the amendments would enable the banking sector to extend its outreach to other sectors of the national economy for a balanced growth and multifaceted progress.

Published in Dawn, March 10th, 2018