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Nov 22, 1999

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

Rs 202.5m financing approved

The Board of Directors of Saudi Pak Industrial and Agricultural Investment Co Ltd has approved total financing of Rs 202.5m to six companies in its meeting held.

The company said the financing comprised of Rs 192.5m for five projects in manufacturing sector and Rs 10.0m for in the financial sector.

Forex reserve up

Pakistan's foreign exchange reserves rose to $1.61bn on November 13 from $1.59bn on November 6.

The latest State Bank report issued revealed that on Nov 13 Pakistan had about $1.409bn worth of approved forex reserves and $211mn worth of balances held abroad in cash and short term securities.

Imprudent bankers face action, says Aziz

Banks and other financial institutions made a cash recovery of Rs8 billion out of their stuck-up loans of Rs211 billion during a month-long drive against defaulters, Finance Minister Shaukat Aziz told a press conference here on Wednesday.

"Information is still pouring in from remote bank branches and the figure could improve," Aziz told reporters at the State Bank head office.

Earlier, he held meetings with heads of bank and financial institutions to get first-hand knowledge about recoveries and rescheduling of loans.

He said the government would launch a crackdown only on the wilful defaulters making it clear that non-wilful defaulters would be allowed to negotiate repayment deals with their banks on commercial basis.

To a question, he said the government was contemplating action also against the bankers if their collusion with the defaulters was established.

He said that in the second phase of the recovery drive action would be taken against imprudent bankers found involved in loan defaults.

Sources privy to the meeting Aziz held earlier said he had raised this issue at the meeting. "In fact, the minister told us that he had come to know about a few cases where involvement of bankers was established," one participant said.

The minister remained evasive to several questions put to him during his 15-minute press conference. In response to a question, he denied knowledge about the arrest of top defaulters on Wednesday and advised the questioner to direct such queries to the ministry of interior.

Rating downgraded on bond rescheduling

Pakistan's credit ratings have been downgraded by international credit ratings agencies following its decision to reschedule $600m worth of Eurobonds. The bond markets are reacting negatively to Pakistan's offer.

Pakistan announced on Nov 15, that it would seek to reschedule Eurobonds at the Paris Club which the Club had asked it do in January of this year, an idea which was floated by the International Monetary Fund's donors. The move was driven by the need to resolve Pakistan's dispute with the Paris Club of lenders.

The investors have lost confidence in Pakistan's Eurobond issues and little interest is being manifested on Pakistan's new offer, analysts said.

The Paris Club sought a restructuring of the bonds as a condition for restructuring Pakistan's foreign debt of $3.3bn.

PTCL posts after-tax profit

Pakistan Telecommunication Company Limited (PTCL) unveiled financial figures for the year ended June 30,1999, which came out on the top end of market expectations, both in respect of profit and the payout.

The telecom posted after tax profit at Rsl7.568 billion on operating revenue amounting to Rs51.187 billion. This represented a solid growth of 22.4 per cent over a year ago profit at Rsl4.348 billion and 10.2 per cent increase in revenue over Rs46.466 billion for 1998.

Rsl5m defaulted co-op loans recovered

Cooperative loans amounting to Rs 15.072 million extended by Provincial Cooperative Bank were recovered during the period from October 17 to November 16 - the deadline for recovery of loans from defaulters.

During the period from July 1, 1999 to October 15, the loans recovered stood at Rs 3.280 million only.

80pc stuck-up small loans recovered

Punjab Small Industries Corporation (PSIC) has recovered its 80% of outstanding loans and further targeted to enhance recovery rate up to 90 % under its special recovery campaign.

Recoverable amount of the PSIC against its loanees was Rs. 1892.97 million in total till October last and the corporation has made recovery to the tune of Rs. 1519.84 million till now, Managing Director PSIC Ghulam Rasool Choudhary told.

Industry shares 79pc of total loan defaults

Industry shares almost 79 per cent of the total loans default in the country mainly due to the perpetual adhocism practised by the successive governments during last 20 years, along with the recession that hit globally, which has also afflicted the domestic market—an almost five times depreciation in Pakistani rupee's exchange value since 1981 — and of course the inherent and unending greed of many businessmen who received all patronage from the military and civilian rulers.

According to the bankers, the much maligned agriculturists share hardly 5.36 per cent of the total default of big amount loans of Rs30 million and above. "But remember many of these agriculturists who were in all the assemblies and in every government after 1985 have claimed a big chunk of industrial loans and have defaulted on payment", a top executive of a financial institution reminded emphatically.