Feb-04 - Feb-10, 2002
First Islamic bank to be functional in Feb-March
If all goes well — one can walk in any of the
five branches of the first-ever Islamic bank in Pakistan by end of
February or early March. Sponsors of the banks say they have in store
a range of banking products to attract those who want to invest money
in Riba-free schemes or make Riba-free borrowings.
"We hope to be in business by end of February
or early March," said chief executive of Al-Meezan Investment
Bank, Irfan Siddiqui.
He was talking after receiving the licence to set
up the first Islamic commercial bank from State Bank Governor Dr.
Ishrat Husain on Wednesday.
The investment bank has got the licence for Islamic
commercial bank under the name of Meezan Bank Ltd. with major
share-holding of Pakistan-Kuwait Investment Company. The SBP chief
presented Siddiqui the licence to set up the Islamic bank at a
ceremony held at the SBP head office.
Under a Supreme Court verdict Pakistan is bound to
transform its financial system into the one conforming to the Islamic
law before July this year. The SBP move to allow setting up of
first-ever Islamic commercial bank "is a major step in this
direction," to quote an SBP press release.
The central bank had invited applications for the
Islamic bank last month. The sponsors of Meezan Bank Ltd. met all
conditions laid down by the SBP for this purpose and received the
The sponsors of the first Islamic commercial bank
are: (i) Pak-Kuwait Investment Company (30%); Shamil Bank of Bahrain
(25%); Islamic Development Bank (9%); Kuwait Auqaf Public Foundation
(8%) and Societe Generale of France (10%). Siddiqui told that 18 per
cent shares would be offered for public subscription.
"What we have to do next is to acquire
Pakistan operations of Societe Generale," Siddiqui said when
asked what else is to be done to launch the Islamic bank. "We are
already at an advanced stage of negotiations with SG and we hope to
sign the deal soon."
Diesel prices cut by 2.45 per cent
The Oil Companies Advisory Committee (OCAC) has
slashed the prices of high speed diesel (HSD) by 2.45 per cent to
Rs14.74 from Rs15.11 per litre. Prices of other products like petrol,
HOBC, light diesel oil (LDO) and kerosene remained unchanged.
The Price of JP-4 has been cut to Rs13.48 from
Rs13.86 per litre, while the price of JP-1 has been increased by 0.38
per cent to Rs10.66 from Rs10.62 per litre. The ex-depot fixed sales
prices at 29 designated locations will be effective from February 1,
The end consumer prices for most products,
therefore, have not registered any change except for diesel and JP-4,
declining by Rs0.37 and Rs0.38 per litre respectively.
FUEL OIL: Pakistan State Oil (PSO) has cut the
prices of high sulphur fuel oil (HSFO) by Rs142 per ton to Rs9,083
from Rs9,225. The price of light sulphur fuel oil (LSFO) has also been
slashed to Rs10,591 from Rs10,909.
Shell Pakistan Limited (SPL) also announced price
cut in fuel oil by Rs136.85 pmt to Rs9,091.90 from Rs9,228.75.
HBL assures SMEs of financial needs
The Habib Bank Ltd (HBL) would encourage small and
medium enterprises and meet their financial needs even if it has to
take risk but of course would not gamble.
This was stated by commercial banking chief of HBL,
Mirza Saleem Baig, at a workshop jointly organized by the Union of
Small and Medium Enterprises (UNISAME) and HBL.
As a matter of fact, Baig said HBL's majority of
clients and account holders belonged to SMEs and that had been a
factor reason behind bank's good financial health.
He assured the entrepreneurs that if an applicant
satisfies the bank about his abilities to perform and possesses the
know-how and has necessary set-up there is no reason for his rejection
and can obtain full support and finances for his venture.
Yield on PIBs set to fall
The State Bank is expected to cut the coupon rate
on 10-year Pakistan Investment Bonds before conducting the next
auction of the bonds due in February. The central bank may also lower
the coupon rates on three-year and five-year PIBs in March.
State Bank to set up swap desk
The State Bank of Pakistan (SBP) has decided to set
up a desk to buy dollars from banks through rupee-dollar swaps,
bankers close to SBP told. They said the desk might be created next
The SBP has so far made an outright buying of about
$1 billion from banks after the September 11 attack on the US.
Occasionally it has also made forward dollar buying through swaps. But
now the central bank is going to create a desk to swap rupee-dollar
with banks for fixed tenures.
Presidents of two big banks — Habib Bank and the
National Bank of Pakistan — dropped broad hints on Monday of their
inability to bring down lending rates on the plea that the drag of
non-performing loans has put a burden of 4 to 5 per cent fixed cost on
"A reduction in this fixed cost to 2 to 2.5
per cent will enable the banks to consider lowering lending
rates", Ali Reza, President of the National Bank of Pakistan
bluntly told a gathering of businessmen on Monday.
IMF wants revenue improved
The International Monetary Fund has called upon the
government to improve revenue collection in order to avoid cutting
development budget for meeting the fiscal deficit targets.
"There is a need to increase revenues by 18 to
20 per cent of the GDP which are currently about 15 per cent of the
GDP", said Paul Chabrier, IMF Director for Middle East and South