LARKANA, Nov 27: The State Bank Governor Dr Shamshad Akhtar has rejected reports that IMF asked Pakistan to impose agriculture tax as a pre-condition for its loan and the government has shown willingness, claiming that the loan will help strengthen the country’s economic condition.
Talking to journalists after addressing at a reception hosted in her honour by Larkana Chamber of Commerce and Industry, Dr Shamshad ruled out the impression that the IMF loan would have negative impact on economy.
She said that credit flow had risen to Rs430 billion from Rs70 billion and expressed hope it would further improve in future. The volume of non-performing loans, which was 30 to 40 per cent, had now dropped to only 1.1 per cent, she said.
She said that credit facilities in past were restricted only to influential people but “we are gradually trying to diversify it so that loans can be extended to all”.
She said that a good banking policy had been adopted to meet the country’s requirements and added that the SBP was to regulate and supervise the banking system to ensure that it offered the best services.
Sindh was rich in agriculture but it was quite discouraging to note that the province was not borrowing more from the banks, she said and asked the chamber leaders to find out how the banks could serve the agriculture field maximally.
Dr Shamshad said that the bank was exploring the idea of establishing ‘satellite’ offices but it would take time as the step would require comprehensive study.
She said that inflation was on the rise and the central bank and the government were making joint efforts to contain it. The country would, however, come out of current financial crisis, she said.
She said that besides IMF loans, other flows were also coming in and prices of local commodities had started showing downward trend while reserves were steadily building up.
The president of the chamber called for streamlining loaning facilities for agriculture sector and said that Sindh and Balochistan exported $2 billion worth Irri-6 rice annually but they did not have the facility of Letter of Credit (LC).
Earlier, Dr Shamshad went to Moenjodaro and visited the museum. She also visited Garhi Khuda Bakhsh Bhutto, offered fateha on the graves of Bhuttos and laid floral wreaths.
Our Sukkur correspondent adds: Addressing a dinner hosted in her honour by the Sukkur Chamber of Commerce and Industry on Wednesday evening, Dr Shamshad said that Pakistani banking system was strong enough and speculations about the country going bankrupt were wrong and baseless.
The central bank had taken action against moneychangers and so far licenses of many moneychangers had been suspended. Final action against them would be taken after FIA investigations were over, she said.
She said that the central bank had directed commercial banks to increase volume of agriculture loans. The bank planned to advance Rs211 billion agricultural loans during current fiscal year, she said.
She said that the government tried hard not to pass on the burden of rising prices of commodities, especially petroleum products, to people but it was not possible.
She said that foreign investors had started coming to Pakistan and hoped there would be more investment this year in comparison with last year’s $5 billion.
Our Naushahro Feroze correspondent adds: Dr Shamshad accompanied by her father, who is a former chairman of the PIDC, visited her native village Nather Detha near here on Wednesday.