KARACHI: Led by President FPCCI Mian Nasser Hyatt Maggo met SBP Governor Dr. Reza Baqir here and discussed at length the issues faced by industry and trade community of the country at the hands of commercial banks and the effects of higher policy interest rate.
Mian Nasser Hyatt Maggo said the policy interest rate must not be over 6% and if SBP wanted to promote business activities and economic growth in the country, it should be brought down to 5 percent, says FPCCI release on Thursday. FPCCI President also mentioned that policy interest rate in the region was 3% to 4% only and Pakistan businesses community had to compete with the region.
SBP’s TERF scheme totally ignored SMEs and only few well-established industries were supported. He also emphasized to put limitations on T-Bills and regulating commercial banks for making more lending capacity spared for business and industry.
SBP Governor, Dr. Reza Baqir assured FPCCI delegation of SBP’s full support and explained the programs and tangible steps that SBP has taken to promote business and economic growth. He said the policy rate had been brought down to 7% from 13% and foreign exchange reserves had been increased by dollars ten billion over a period of two years and these facts should give confidence to the business community vis-à-vis economic stability.
Dr. Reza Baqir said that SBP wantrd to give confidence to the business community and at the same time achieve sustainable growth in exports and GDP growth. Rs150 billion had already been disbursed under the TERF scheme and a total of Rs 560 billion will be disbursed and SBP will had more consultations with FPCCI and their recommendations would be taken into account.
He said SBP would issue licenses to digital banks and would also regulate conventional commercial banks to implement SBP’s digitization programs. He said that in total Rs 2000 bn would be utilized by the Government of Pakistan to offset the impact of COVID-19 on Pakistan’s economy.
FPCCI former president Mian Anjum Nisar said SBP should create better and efficient linkages with the business community as he felt that SBP was not fully aware of the issues hampering business growth.
FPCCI Vice President Nasir Khan expressed his concerns over lack of support for export industry and dismal numbers for border trade as compared to the potential. He pointed out that many countries in the world have 75 % share of border trade in their total exports.
SBP Deputy Governor Ms. Seema Kamil said many more financial digitization programs would be launched in a phased and sustainable manner, e.g. Raast Bulk, P2P Transactions and P2M Transactions.
Ms. Lubna Bhayat, Convener Central Standing Committee of FPCCI on Banking and Credit Management said that the business community is ready to invest in FinTech as this is the future of banking industry.