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Apr 03 - 09, 2000

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

Curbs on forex outflow eased

The State Bank has restored the freedom of foreign portfolio investors to remit funds outside Pakistan without its prior approval. The decision is effective from March 30.

The SBP said on Thursday that foreign institutional investors can remit funds without its approval through the banks that act as their custodian as well as maintain their special convertible rupee accounts. The SBP made the announcement through a press release. Bankers said they had not received any circular till the close of the business on Thursday.

Senior bankers close to SBP said those foreign investors who maintain their special convertible rupee accounts with the banks other than their custodian banks still need prior SBP approval to remit funds outside Pakistan. They say this restriction has been kept in place to check misuse of these accounts for flight of capital.

Only three banks offer custodian services to foreign investors in Pakistan. These are: (i) Standard & Chartered Bank (ii) Citibank and (iii) Deutsche Bank. These banks also maintain special convertible rupee accounts of their customers. These accounts are so named as foreign investors use them for keeping sale proceeds or profits and dividends on shares in rupees that are converted into foreign currency by the State Bank when they want to remit them outside Pakistan.

The decision on remittances of foreign portfolio investors came within 24 hours after SBP had received final recommendations on this subject by a committee comprising officials of Karachi Stock Exchange and SBP and custodian banks.

Pakistan placed restrictions on foreign currency outflow after exploding nuclear devices in May 1998. But in January this year it lifted curbs on remittances of profits and dividends on foreign direct investment as well as payment of private foreign loans.


Prudential Commercial Bank has recorded pretax profit of Rs 58 million, from Rs. 12 million to 70 million in 1999.

Modest rise in remittances

Overseas Pakistanis sent $606 million back home during July 1999 to February 2000: they had sent in $582 million between July 1998-February 99.

Though the $24 million increase in inflow of foreign exchange is just nominal it indicates that overseas Pakistanis are willing to send in more money through banks. But sources at ministry of finance said the ministry is not satisfied with the pace of home remittances. They said Finance Minister Shaukat Aziz has summoned, in Karachi on Thursday, heads of six banks to find out ways for boosting home remittances into Pakistan.

Rs620m loan

United Bank has arranged a syndicated loan of Rs620 million for Nishat Mills to finance its value additional machinery, says a press release. The syndicate members include UBL, HBL, Saudi Pak Agricultural and Investment Bank and Gulf Commercial Bank.

An agreement to this effect was signed recently in Lahore. Nishat Mills is ranked among top textile companies with an installed capacity of 176,500 spindles and 458 weaving machines.

NBP for simple loaning procedure

The board of directors of National Bank has asked the bank management to continue its efforts to reach out to small and medium borrowers with simplified loaning process.

The board met with President Mohammadmian Soomro in the chair and reviewed the progress of bank operations in various fields. A source close to the meeting said the board directed the bank management to remove bottlenecks in smooth flow of credit towards small and medium borrowers in particular.

UAE group plans over $2 bn investment in Pakistan

The UAE Offsets Group plans to invest some 2 to 3 billion US dollars in downstream industrial projects and the energy sector in Pakistan.

The group had recently signed an agreement with Pakistan that sets the stage for a multimillion dollar project under the Dolphin initiative, said Pakistan's Ambassador to the UAE Khayyum Qaiser.

In an interview here he spoke of the steady rise in trade between the two countries. Commodities such as rice, fruits and vegetables, furniture and textile have been identified for export-thrust during 1999-2000. "We are also exploring the scope for exporting machinery, agriculture tools, sports and surgical goods and their reexport potential to other countries in the region," Qaiser stated.

Principals invest $91m in ICI Pak

ICI Plc. UK, have made a new equity investment of $91.1 million in ICI Pakistan which would help reduce the borrowing costs of the company for its PTA plant.

Institutional investment in NSS stopped

The Government has stopped the institutional investment in the National Savings Schemes (NSS) with immediate effect.

The Central Directorate of National Savings has sent a letter to the State Bank which issued a circular on Monday announcing the decision that there shall be no institutional investment in National Savings Schemes.

PICIC resumes long-term lending operations

Pakistan Industrial Credit and Investment Corporation (Picic) has decided to restart long-term lending operations with immediate effect.

The long-term financing will pertain to balancing, modernisation and replacement (BMR).

The long-term lending operations remained suspended for the last five years due to paucity of funds. Now, the operations are being resumed after the liquidity position of the corporation has improved.

Investors shy to invest in EPZ

Investors appear hesitant to invest in the just established Export Processing Zone at Risalpur, 45 kilometres from here, official sources told.

Set up at a cost of around Rs 137 m, the Risalpur EPZ appears to be of least attraction for foreigner or local investors situated as it is far away from the Karachi seaport and due to the ban on exports through land route from NWFP.