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Sep 17 - 23, 2001

Private sector gets Rs54.1bn bank credit

Net borrowing of the central and provincial governments for budgetary support fell slightly short of target in fiscal 2000-01: the borrowing stood at minus Rs32.9 billion against the revised target of Rs39.4 billion.

Officials say the central government made a net retirement of Rs8.2 billion bank loans, whereas provincial governments retired Rs24.7 billion.

Initially the IMF had projected net borrowing of the central and provincial governments at minus Rs14.5 billion, but later on the federal government had revised the figure towards the end of the fiscal year.

The net government borrowing of minus Rs32.9 billion was in addition to a net retirement of Rs12.5 billion in commodity operation plus some unidentified retirement of Rs1.4 billion in 2000-01. Thus overall government sector borrowing stood at minus Rs46.8 billion.

Final figures for government borrowing for budgetary support reveal that the central government borrowed Rs1.9 billion from commercial banks in 2000-01 but at the same time it retired Rs10.1 billion thus keeping its net borrowing at minus Rs8.2 billion. On the other hand the provincial governments retired Rs3.3 billion loans of commercial banks and Rs21.4 billion of SBP. Thus their net borrowing stood at minus Rs24.7 billion.

Officials say the final figures of growth in monetary assets have been provided to the IMF. The IMF would use these figures for making fresh projections under a new financing arrangement.

In the last fiscal year the private sector proper received only Rs54.16 billion worth of bank credit against an initial IMF projection of Rs86.6 billion. Pakistan had involved the IMF in making projections for growth in monetary assets in 2000-01 to meet some pre-requisites of its $596 million standby loan that the IMF approved at the end of November 2000.

Full-fledged Islamic bank planned: Ishrat

The Governor, State Bank of Pakistan (SBP), Dr Ishrat Hussain has spelt out three options, which have been under consideration of the government to enforce Islamic banking and to do away with interest-based transactions.

Under the first option, the SBP Governor informed a gathering of local traders of the Karachi Chamber of Commerce and Industry on Wednesday, a full-fledged Islamic bank would be set up, which would have its own Sharia board, and introduce and offer sharia compliant products.

Under the second option, existing banks would be asked to set up Islamic subsidiary for starting Islamic banking in conventional branches and would maintain a separate balance sheet.

In the last option, existing banks would be asked to open branches to conduct Islamic banking and set up separate accounts and deposits.

ADB to focus on poverty alleviation

Under a redefined strategy, the ADB is now focusing comprehensively on the poverty alleviation in which pivotal role has been assigned to private sector, ADB Resident Representative in Pakistan Marshuk Ali Shah said on Monday.

Speaking at the inaugural session of a seminar on 'The Business Opportunities' jointly organized by the FPCCI and ADB on Monday at the FPCCI House, Marshuk Ali pointed out his bank's direct cumulative assistance to the country exceeds $250 million.

Over and above this, he said the bank has arranged co-financing facilities of about $104 million through foreign commercial sources for private sector, he said adding that the bank has invested in over two dozens projects in the private sector in a wide variety of industries, companies and financial institutions.

Income Tax Ordinance

The government on Thursday promulgated Income Tax Ordinance, 2001, which will come into force from July 1, 2002.

Although Dawn has already printed the text of the new ordinance on July 4, 2001, informed sources said some minor changes have been made to the text. The new law is drafted in plain language for easy comprehension, and it is more systematic and provides for easier self-assessment.

New business rules

The Securities and Exchange Commission of Pakistan (SECP) is expected to introduce within three weeks a new regulatory framework and new conduct of business rules for the development of mutual fund industry.

EU envoy not coming

Poul Nielson, the European Union's development and humanitarian aid commissioner, on Wednesday cancelled a trip to Pakistan and Afghanistan in the wake of Tuesday's attacks in the US, his office said. His trip was to have included a tour of refugee camps and meetings with representatives of the Taliban and the Afghan opposition.

NWFP takes over power project

In a surprise move, the NWFP government has taken over a $115 million Canadian private sector power project and ensured that its ground-breaking was performed by the President notwithstanding the Supreme Court stay order.

Case disposed

"A full bench of the Lahore High Court on Thursday, September 13, 2001 disposed of the petition filed by Aziz-ul-Haq Qureshi against WAPDA, Government of Pakistan and Hubco. The lawyers representing the Applicant stated that they did not have any objection to disposal of the case.

A Hubco spokesman welcomed the decision of the apex Court and hoped that it would positively contribute to a better investment climate in the country particularly with reference to the international investors confidence."

Rs15bn needed to run LBs

An additional sum amounting to at least Rs15 billion is required for running the administrative structure of the newly-elected district, tehsil and union councils but no budgetary allocation has been made for the purpose, a study carried out by the Sustainable Development Policy Institute points out.