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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 deviations.

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 loans".

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.