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Nov 22, 1999

  1. International
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'NIT, ICP to be energized'

Federal Minister for Finance, Shaukat Aziz assured the Board of directors of the Karachi Stock Exchange that the Government would act only against beneficial owners of loan defaulting companies and nominee directors or directors representing minority shareholders would not be subjected to any harassment, a KSE press release stated.

He was addressing the Board on his first visit to the bourse on Wednesday.

He said the banks had the prerogative to identify the wilful defaulters but the underlying idea was not to go after businessmen who may have defaulted on genuine business reasons. 'However, those groups which have misused the loan facility, or exercised political clout in order to get loans and write offs would be taken to task', the Minister reiterated.

SBP for daily revaluation

The State Bank has instructed all banks and non-bank financial institutions to enter into master repo agreement with their counter parties before striking repo deals between themselves. The decision would take effect from November 30, 1999.

Master repo agreement is an internationally standardized and locally modified document that envisages provisions to settle defaults by either parties entering into a repo agreement. Once the banks enter into master repo agreement they can undertake as many repo transactions with the other party as they want because they know the legalities of managing the risk of defaults. Years before the absence of master repo agreement in India has caused its banking system a huge loss because of large multiple but fake repo deals.

Bankers to verify identity

The State Bank has asked all banks and nonbank financial institutions to verify the credentials of those posing as the nominees of National Accountability Bureau or any other agency and seeking their records for investigation.

"It has been decided that before allowing access to the record of the bank/financial institution the concerned official should verify and satisfy himself about the credentials of such persons from the authority letter of the Bureau, his service record and/ or national identity card etc.," said a SBP circular (BPRD no 40) issued on Wednesday.

Wapda, Hubco sign LC worth Rs3.95bn

Wapda and a consortium of banks, led by the National Bank of Pakistan, signed an agreement for a stand-by Letter of Credit worth Rs3.95 billion in favour of Hub Power Company here on Tuesday.

NBP's part in the amount agreed will be Rsl.55 billion, Habib Bank Rs750 million, United Bank Rs600 million, Allied Bank Rs550 million, Askari Bank Rs395 million and Bank Al-Falah Rs200 million.

NBP regional chief Asif Hasan and Wapda's General Manager Finance (power) Javed Nizam signed the agreement on behalf of their respective organizations. Senior Wapda and banks officials were also present.

The agreement aims at easing tension prevailing on financial matters between Wapda and Hubco.

NAB ordinance issued

President Mohammad Rafiq Tarar promulgated an Ordinance late on Tuesday night to provide for the setting up of a National Accountability Bureau so as to eradicate corruption and hold accountable all the accused involved in such practices.

Whereas it is expedient and necessary to provide for effective measures for the detection, investigation, prosecution and speedy disposal of cases involving corruption, corrupt practices, misuse/abuse of power, misappropriation of property, kickbacks, commissions and for matters connected and ancillary or incidental thereto.

And whereas there is an emergent need for the recovery of outstanding amounts from those persons who have committed default in the repayment of amounts to banks, financial institutions, government and other agencies;

And whereas there is a grave and urgent need for the recovery of state money and other assets from those persons who have misappropriated or removed such assets through corruption, corrupt practices and misuse of power and/or authority;

And whereas it is necessary that a National Accountability Bureau be set up so as to achieve the above aims;

And whereas the National Assembly and the Senate stand suspended in pursuance of the Proclamation of the Fourteenth day of October l 999 and the Provisional Constitution Order No. l of l999, as amended;

And whereas the President is satisfied that circumstances exist which renders it necessary to take immediate action;

No therefore, in pursuance of the aforesaid Proclamation and Provisional Constitutional Order as well as Order No. 9 of 1999, and in exercise of all powers enabling him in that behalf, the President of the Islamic Republic of Pakistan is pleased to make and promulgate the ordinance.

EAB forms 12 groups

The first meeting of the 15-member Economic Advisory Board constituted 12 groups here on Monday to propose recommendations for bringing improvement in the various fields of the economy.

The meeting which was chaired by minister for finance Shaukat Aziz, according to informed sources, was of the views that the country needed bold and popular decisions to drastically improve the current economic situation.

The members of the Board offered their point of view on various issues and expressed the hopes that their recommendations will be accepted by the military government.

Rules on buy-back of shares okayed

The Policy Board of Securities Exchange Commission of Pakistan (SECP) has approved, the rules to allow the listed companies to buy-back their shares and to float term finance certificates and bonds for resource mobilization under asset-backed securitization.

The approval was given after receiving response from 20 trade and professional bodies to the draft of the two notifications on companies share buy-back (proposed), and the asset-backed securitization (proposed) rules, 1999.