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