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FINANCE


Jan-07- 13, 2002

Shaukat opens SME Bank

Minister for Finance Shaukat Aziz has assured the business community that various irritants including those relating to the Central Board of Revenue (CBR) will be removed to encourage increased private sector investment in the country.

"There are irritants and I do recognise that and that is why we are taking necessary measures to remove those irritants which also relate to the CBR," he further stated.

Inaugurating the Small and Medium Enterprise (SME) Bank on Tuesday, he said that irritants existed at federal, provincial and district level, which needed to be removed to facilitate new investment by the private sector.

"There are still 30 agencies which harass people," he said adding that the government would not tolerate hurdles to increasing business activities and that business community's genuine complaints in this behalf would be removed.

He expressed the hope that the SME Bank would cater to the requirements of the relatively small entrepreneurs to help them set up their businesses. He said that the SME Bank would play a pivotal role in strengthening the economy and generating new employment opportunities.

Aziz said that the SME Bank will reach its target market through programme lending schemes that had been designed to enable fast processing of loans.

He pointed out that 30 per cent GDP growth came from small and medium enterprises and as such they were an important contributor to improving the country's economy. "Then 80 per cent employment comes from the SMEs and their share in export is about 25 per cent and that is why it is said that they are important engine of growth."

Earlier, he said, the government had set up a Koshhali Bank which was providing small loans to the needy people. "And now SME Bank should focus on small and medium lending to the businessmen on merit," he urged.

Petrol, diesel prices up

The Oil Companies Advisory Committee (OCAC) on Monday raised the petroleum products prices by 2.52 per cent to 12.87 per cent. The new prices will be effective from Jan 1, 2002.

The price of High Speed Diesel (HSD) has been increased by 12.87 per cent to Rs14.47 from Rs12.82 per litre, while the petrol price has been fixed at Rs29.59 from Rs28.74 per litre, up by 2.96 per cent.

Kerosene oil will now cost Rs13.98 as compared to Rs13.41 per litre, while the new price of light diesel oil (LDO) has been revised upward to Rs12.31 from Rs11.56 per litre. JP-4 and HOBC will now be available at Rs13.52 and Rs33.79 per litre as compared to Rs12.80 and Rs32.96 per litre.

Refineries raise LPG prices

National Refinery Limited (NRL) and Pakistan Refinery Limited (PRL) have raised the prices of liquefied petroleum gas (LPG) by Rs900 per ton from January 1.

Attock Refinery Limited (ARL) notified on Tuesday the increase in LPG price to Rs16,376.7 per ton from Rs15,159.8.

The new price of PRL's LPG is Rs12,866 per ton, up by Rs900 and almost same increase has been made by NRL, officials in these refineries said.

As a result of this, LPG prices registered a surge in the last few weeks to Rs35 per kg. An LPG cylinder of 11.8 kg now costs Rs265 as compared to Rs230, but in some areas the price of cylinder has surged by Rs50.

SBP separates public service functions

The State Bank of Pakistan Services Corporation starts functioning from Tuesday (Jan 2, 2002) as a subsidiary of the State Bank of Pakistan. With an authorized capital of Rs1 billion, it will be fully owned by the SBP and will perform public dealing functions that among others include the issue, supply, sale, encashment and handling of prize bonds and holding draws.

The government has amended the SBP act and promulgated an SBP Services Corporation Ordinance on December 29 to provide a legal cover to the bifurcation of the central bank into two organizations. The SBP will continue to perform the core functions.

State Bank buys $637m

The State Bank of Pakistan has made direct purchase of $637 million from the kerb market in last six months as against $755 million in the corresponding period last year.

Claiming that this intervention of the central bank did not bring any difference in the kerb, the SBP governor said that it helped in building up the country's foreign exchange reserve to $4.8 billion level. Of this, the SBP reserves are $3.1 billion and the remaining are $1.7 billion foreign exchange account deposits.

Banks asked to have Rs1bn capital base

All banks have been asked to have a minimum capital base of Rs1 billion before end December 2002 failing which, the State Bank Governor Dr Ishrat Hussain warned on Tuesday, "all such banks would be de-scheduled."

"Consolidation and mergers is the answer which I have been pleading," Dr Ishrat declared at a press conference at the SBP while pointing out that a criterion of Rs750 million minimum capital base for banks has already expired end-December 2001.

Rupee stable against dollar

The rupee on Monday stayed firm against the dollar as demand from the leading importers for the US currency remained relatively slow owing to fears of war.

Unconfirmed reports say a section of exporters is also unloading in part export proceeds to support their rupee commitments. The dollar was quoted at Rs59.75 and Rs60.25 as compared to Rs60 and Rs59.95 for buying and selling on last Saturday, off 25 to 30 paisa.

Parco declares dividend

The board of directors of Pak Arab Refinery Limited (Parco) on Monday announced a cash dividend of 34 per cent for the year 2000-01 together with the issue of four bonus shares for every Rs10 face value share held (432 per cent).