FINANCE

 

Nov 25 -Dec 01 , 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF


ADB OKAYS $300M FOR DECENTRALIZATION PLAN

The Asian Development Bank (ADB) has approved $350 million for the Decentralisation Support Programme and the Sindh Rural Development Project $300 million for the DSP and $50 million for the SRDP.The DSP will provide fiscal support to the Pakistan government for improved local government representation, accountability and efficiency.

 

The new funding line is being offered to Pakistan by the ADB as the government has demonstrated strong commitment to governance reforms articulated through its Decentralisation Plan 2000 to address issues related to chronic access to justice, basic service delivery, political representation and gender equity issues.

The legal and political framework for these reforms is already in place. The Local Government Ordinance 2001 clearly assigns powers and functions to local governments, provides for transparent systems and revenue generating powers for local government financing and ensures elected representatives' control of local administrations.

According to local ADB office, the important challenge now for the federal government is to be able to bear the medium-term costs of implementing fiscal decentralisation, which is vital for sustaining and entrenching decentralisation.

Explaining the objectives of the DSP, M. Ali Shah, country director for ADB, said the programme is structured around three policy outcomes.

The first outcome relates to ensuring sufficient and effective federal support for decentralisation and related reforms. Reforms under this policy outcome include effecting fiscal restructuring to transfer fiscal resources to provinces and local government, building capacities at the provincial and local government levels to adopt new systems and procedures related to decentralised governance.

The second component relates to promoting effective and sustainable province-local intergovernmental relations.

DISCOUNT RATE SLASHED TO 7.5PC

The State Bank has finally cut the discount rate by 1.5 percentage points to 7.5 per cent. This is the first rate-cut of this fiscal year.

The SBP notified the rate-cut through a circular issued to all banks.

The discount rate is the rate at which the banks can borrow funds from the SBP for up to three days against the government securities like treasury bills and long-term investment bonds.

The 150 basis points cut in the discount rate is seen by the financial sector as a major move towards persuading banks to offer cheaper credit to the private sector to lift the sagging economy.

REMITTANCES RISE TO $1.4BN

Workers remittances or money sent back home by overseas Pakistanis almost tripled to $1.3 billion in July/October this year from $449 million in a year-ago period.

Gross home remittances rose to $1.43 billion in four months to October 2002 from about $529 million in the comparable period of 2001.

Gross home remittances include workers remittances; encashment of foreign currency bearer certificates and foreign exchange bearer certificates; Hajj remittances and remittances from Kuwait Iraq war affectees.

The State Bank announced the latest figures for remittances through a press release.

The release said that in the month of October 2002 Pakistan received gross remittances of $377 million as compared to $185 million in October 2001.

UNITED NATIONAL BANK LTD IN UK

Pakistan International Bank (UK) Ltd., the UK based joint venture of United Bank Ltd and National Bank of Pakistan, has renamed itself as United National Bank Ltd.

A press release issued by NBP says that the restyled bank has received all required authorizations and approvals including that of the FSA and will be known by its new name with immediate effect.

The ownership structure of United National Bank Ltd. remains as before, being owned 55 per cent by United Bank Ltd. and 45 per cent by National Bank of Pakistan. The joint venture was launched in November 2001 with an initial capital of 30 million pounds.

SUI SOUTHERN GAS COMPANY

The financial figures for the first-quarter ended September 30, 2002, released earlier this month showed the gas utility posting pretax profit at Rs471 million, representing 5.6 per cent increase over profit before tax of Rs446 million in the corresponding period of the previous year.

RUPEE PALES

The rupee lost eight paisa to a US dollar in the inter-bank market. Bankers said the rupee closed at 58.57/58.58 against the previous closing of 58.49/58.50.

STATE BANK MOPS UP RS13BN

The State Bank mopped up part of the surplus liquidity from the banking system through one-week repo of treasury bills.

The SBP sucked in Rs13 billion through one-week repo with a number of banks at an open market operation at 2.95 per cent. This was the first OMO after the 1.5 per cent cut in the SBP discount rate. Senior bankers said the OMO had attracted bids worth Rs27.35 billion but the central bank accepted Rs13 billion bids and rejected the rest.

FIRST GRINDLAYS MODARABA

All but two of the thirty-nine modarabas listed on the Karachi Stock Exchange, have been trading at disconcerting discounts to their par value.

The exceptions are First Imrooze Modaraba, now tagged at Rs31 and the First Grindlays Modaraba priced at Rs27.55.

ADBP DISBURSES RS13.87M

Agricultural Development Bank of Pakistan (ADBP) has reinforced its priority for increased and expeditious financial assistance for rural poor, specially the women through micro credit scheme.

According to ADBP statement, the bank under this scheme during July-Sept 2002 disbursed Rs13.872 million for self-employment income generating activities.