ISLAMABAD, Jan 17: President Gen Pervez Musharraf has assured the business community that interest rates of the banks will shortly be reduced to help attract private investment.

The assurance was given at a meeting with 48 leading businessmen here on Thursday, official sources said. He listened to their various demands specially lowering the mark-up rates of the banks.

He said the State Bank and the Ministry of Finance were currently looking into the issue. He agreed that banks’ interest rates needed to be reduced to ensure increased private sector activity in the country.

The president was informed that higher interest rates were causing a lot of problems, and that they must be lowered specially when the State Bank had already cut its discount rate.

The sources said that the meeting was told that the government could not force the banks to reduce their rates as they have their own independent boards to conduct their affairs without outside interference.

Nevertheless, the president said that it was the responsibility of his government to remove the genuine problems of the businessmen. It was also said in the meeting that inter-mediation cost of the banks was very high.

The sources said that the president also briefed the participants about the latest situation obtaining in the region and said he was very happy to tell them that Pakistan was today well placed to have immense political and economic support from the United States and other western countries.

The president said he foresaw a great future of Pakistan and that now the business community should also play its role by increasing investment and paying their due taxes.

He briefed them about his latest interaction with President Bush on telephone and his meeting with US Secretary of State Colin Powell in Islamabad on Wednesday, and said that the United States was very much appreciative of his efforts for normalising relations with India.

The president said that the US now believed that Pakistan’s government has gone two steps forward to ensure peace in the region and resolve all differences with India through peaceful means.

The sources said the president pointed out that Pakistan has come back in the comity of nations and that today everybody was appreciating his drive against terrorism, sectarian violence and religious extremism.

He said that Pakistan did not take new measures aimed at curbing extremism and terrorism under any pressure and that he was doing this job eversince he took over in October 1999.

The sources said that the president informed the businessmen that Pakistan was making efforts to deescalate the situation on borders. He believed that situation has improved, and said that the visit of the US secretary of state in the region was also contributing to lower the temperature.

However, he said that armed forces were obsoletely ready to defend every inch of the homeland.

The president invited the businessmen to make increased investment so that the foreign investors could also be attracted for investment in the country.

The president particularly talked about the proposed reconstruction process in Afghanistan, and said that a lot of opportunities existed for Pakistani businessmen in that country.

The sources said that some of the businessmen asked the president whether there will be any quota for Pakistani businessmen, he said that the United States and other western countries believed in fair business practices which everyone will have to follow in the reconstruction process of Afghanistan.