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
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.
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
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
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
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