KARACHI, Aug 13: Two nationalized Pakistani banks—National Bank of Pakistan and Habib Bank Limited—are seeking permission to open their branches in Afghan capital Kabul provided security of the premises, assets and of staff is guaranteed.
Well placed sources said that Afghan authorities are expected to hand over their banking rules by the end of this month, probably when Pakistan’s Foreign Minister Mahmud Kasuri visits Kabul.
Both the government and the State Bank of Pakistan are reported to have given go-ahead signals to the banks and a team of bankers is reported to have made initial exploratory visit twice in the recent past.
The issue of opening banks came up early this month when the second Joint Economic Commission of Pakistan and Afghanistan held two-day session early this month at Islamabad. The JEC is expected to hold at least three meetings in a year and a third meeting is expected in December either at Islamabad or Kabul.
In the second JEC meeting, the two countries had included five businessmen from each side to deliberate on the trade and economic relationship issues.
“Afghan delegation was aggressive and demanded a complete restriction-free transit trade,” Amjad Rashid, a Karachi-based businessman who attended the JEC meeting informed Dawn on Wednesday. Amjad, an international food merchant, is actively involved in the Afghanistan reconstruction work and has concluded 30 million dollars business in Afghanistan in last two years. He has participated in installation and renovation of four radio broadcasting stations at Kandahar, Kabul, Jalalabad and Asadabad. According to Amjad, Afghans claimed that international conventions guarantee a complete restriction-free transit facility from the neighbouring sea ports to all the land-locked country. “Any restriction, quantitative or on selected items runs contrary to the spirit of international conventions,” the Afghans are reported to have stressed in the JEC meeting.
Pakistan has already indicated to delete six items from the 18 items negative list. The indicated six deleted items are television sets, radio, tape recorder, razors, shampoo and soaps. Hardly six per cent of the 26 million population in Afghanistan have access to electric power.
Afghans are now seeking about 100,000 ton of duty-free edible oil import under transit facility. “In Pakistan, the total impact of duty and tariff on edible oil is 95 per cent,” Amjad said. He said that government charge Rs10,800 fixed duty on a ton of edible oil import in Pakistan. Add to this 20 per cent sales tax and other charges. The total impact is almost 95 per cent. Afghanistan has hardly any storage facility and there is noghee plant. Obviously, bulk of this oil will come back in Pakistan as neither Afghan government nor Pakistan is capable of stopping this traffic. It will give such a blow to the Pakistan’s ghee industry that it would hardly recover.
“Afghans want to be in driving seat when dealing with Pakistan and they want free aid and a total restriction free transit facility,” he said.
Amjad said that Pakistani businessmen have access only upto Kabul, Jalalabad and Kandahar. Herat, Mazar Sharif and many other parts in Afghanistan just don’t exist for Pakistani businessmen. Even when approaching Kabul, a truck loaded with goods have to pay Rs10,000 at the check post.
Nonetheless, Pakistan government wants to increase the frequency of PIA flights from Islamabad and Peshawar and has indicated willingness to improve the construction of 40 kilometres stretch road that connects Pakistan check post at Torkham with Kabul.
Afghanistan’s trade volume directly with Pakistan and that of transit through Pakistan has increased appreciably in last one year. Pakistan’s official exports have increased by over 95 per cent to Afghanistan to about $203 million in 2002-03 from $103.45 million a year ago. Afghanistan’s import under transit has also increased by over 22 per cent and exceeded Rs16 billion figure.
Pakistan has agreed to provide some transport and demurrage facilities in transit trade.