Jul 24 - 30, 2000
Stand-by credit on
the cards: analysts
Though the nature and quantum of IMF funding is not yet known,
financial analysts say that "an emergency stand-by arrangement (SBA) may be on the
cards for Pakistan."
Experts say there are two possible financing options from the IMF; one
is resumption of ESAF/EFF or the renamed PRFG and the other is an emergency SBA.
Analysts at Taurus Securities Ltd are of the view that SBA may be
considered due to political constraints attached to the option for EASF/EFF. The G-7
countries may use the EASF/EFF as a bait to resolve the political issues. At the same
time, concern over isolating a strategically important country could have led to the
conception of stand-by arrangement.
The SBA would be relatively on more expensive terms and repayments on
this count would exacerbate the situation requiring debt rescheduling by Paris Club. Under
the arrangement, financing is made available for eighteen months and repayment is made
over a four- year period.
Financial analysts said, this facility could provide some breathing
space into the tight debt servicing programme and help meet obligations for the current
year. It would be a positive sign for the foreign commercial banks and investors.
Sources close to the international lending agencies indicate that the
IMF funding and debt rescheduling by Paris Club would form two major aspects of an overall
package if approved by the Fund Board.
The approval will depend upon and follow the programme that the IMF
team, due in August, is expected to evolve and Pakistan's commitment to execute the stated
policies, programmes without any major deviation.
Though not indicated, the funding programme is expected to be of a
similar size, about $1.2bn, as the previous one that was scuttled after one tranche.
Sources said at this point of time, there are positive indicators for Pakistan. IMF
officials see the budget 2000-01 generally in line with the IMF policies except for minor
Karachi tops by paying Rs3.2b
Among the four cities which fall in the jurisdiction of Southern Region
of Income Tax, the highest number of declarations made under Tax Amnesty Scheme 2000 (TAS-
2000) have been received from the city of Karachi, official sources disclosed.
Sources said that in total 79,411 declarations have been received from
the four cities Karachi, Hyderabad, Sukkur and Quetta bringing in revenue of around
Rs3.8 billion at 10 per cent tax for whitening concealed assets and wealth under TAS-2000.
According to official figures a total of 28,041 declarations have been
filed by the Karachiites under the Amnesty Scheme, delivering a sum of Rs3.2 billion in 10
per cent tax for whitening the assets/wealth of around Rs32 billion value.
The city of Hyderabad ranked second where 2,425 declarations have been
filed giving revenue an impact of Rs137 million, followed by Sukkur with 1,098
declarations and revenue collection of Rs77 million, and Quetta 1,614 declarations
contributing about Rs158 million to government coffers.
ACAC to focus on ADBP's bad loans
A bulging portfolio of bad loans amounting to Rs44.67 billion of the
Agricultural Development Bank of Pakistan (ADBP) will come into sharp focus on Thursday,
when the revived Agricultural Credit Advisory Committee (ACAC) of the State Bank of
Pakistan (SBP) meets to consider and formulate proposed overall agricultural credit plan
of Rs49.26 billion for the current fiscal year.
The bankers who are attending the ACAC meeting speak of the serious
concern expressed by the SBP on the "persistent increase in the ADBP's non-performing
According to these bankers, the non-performing loans, being 50 per cent
of the total loan portfolio of the ADBP, have swelled to about Rs45 billion by the end
June 2000. These bad loans amounted to about Rs42 billion at end June 1999, indicating a
rise of 15.32 per cent on Rs36.25 billion bad loans a year earlier in 1998.
Audit report on irregularities
An audit report on Rs58 billion irregularities, committed in the
federal government expenditure during 1998-99, has been sent to the finance minister for
its onward submission to the chief executive and the president.
The auditor-general of Pakistan (AGP) in a statement issued on Thursday
says that a total of Rs3.77 billion had already been recovered in settlement of various
audit observations. Out of the total amount put under observation, Rs279m is on account of
misappropriation, fraud and corruption.
Hashimi Can to raise capital
Hashimi Can Company Limited proposes to raise the authorized capital to
Rs50.0 million, from Rs20.0 million. An Extraordinary meeting of the shareholders has been
called for Aug 12 to approve the increase.
PTC to create 268m new shares
Pakistan Tobacco Company Limited plans to create 268 million new
ordinary shares to raise the company's authorized capital to three billion rupees. The
company has called an Extraordinary meeting on Aug 11 to seek shareholders' approval.
ADBP disburses Rs25 bn
The Agriculture Development Bank of Pakistan (ADBP) disbursed about
Rs25bn among 397660 farmers during '99-2000, achieving the disbursement target fixed by
the State Bank of Pakistan.
According to an ADBP press release on Tuesday, 80% loans amounting to
Rs19602m were advanced to small farmers. Out of this, ADBP said, production loans given
for farm inputs for rabi and Kahrif constituted 66% of the total disbursement.
About 34% of loans amounting to Rs8342m were provided for development
purposes including Rs5743.6m for purchase of 21515 tractors. On the recovery side.