FINANCE

 

Dec 28 - Jan 05, 2003

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

ASIAN BANK RELEASES 2ND TRANCHE OF $20.9M

The Asian Development Bank (ADB) disbursed $20.9 million for the ongoing Microfinance Sector Development Programme (MSDP).
While releasing this second tranche, the ADB report commends the effective leadership role of the Government of Pakistan, including the State Bank, in

 

instituting an enabling policy, legal and regulatory framework for the development of microfinance sector.

According to a handout issued by the Khushhali Bank, the ADB praised the strong commitment of the government to its poverty reduction agenda. The ADB report notes the effort of Khushhali Bank the first licensed microfinance bank in Pakistan in adopting good governance and successful practices in banking for the poor to emerge as a viable bank with nearly 60,000 clients and 98 per cent repayment rate.

Complementing the MSDP reforms, the ADB board approved $250 million Rural Finance Sector Development Programme (RFSDP) on December 20, 2002 for transforming Zarai Taraqiati Bank Limited into a sustainable financial institution for effectively meeting the financial needs of farmers and rural entrepreneurs. Reform of Zarai Taraqiati Bank (former Agricultural Development Bank of Pakistan) was initiated as part of the MSDP.

The RFSDP also includes a 'new bank fund' of $15 million to provide concessional assistance for institutional development to promoters of licensed microfinance banks in rural areas.

Shaukat Aziz, adviser to prime minister on finance, in his policy statement on Nov. 4, had reiterated the government's resolve for establishing a pro-poor financial system as a critical element for combating the rising incidence of poverty. This was to be undertaken in a manner that was consistent with the overall reforms in the banking sector in terms of autonomy, good governance, privatization and sustainability.

OIL COMPANIES PROFIT IN PERCENTAGE TERMED UNJUST

The oil distribution companies are earning over Rs40 billion profits, which, if curtailed could bring down power tariff substantially and huge relief to common man.

Experts in the oil and power sector criticize government for allowing the companies to fix their profits in percentage terms instead of fixed ones.

"Till December 2001, these companies were charging Rs159 per ton," says an official of the ministry of petroleum. From January 2002, these companies were allowed to fix their profit in percentage; 3 per cent to begin with, with a plan to raise it to 5.5 per cent. This suddenly increased their profits from around Rs700 million to around Rs2 billion from the furnace oil head alone.

ADB APPROVES $120,000 GRANT FOR SINDH

The Asian Development Bank (ADB) has approved a preparatory technical assistance (TA) grant of $120,000 to help plan a health and education project in Sindh.

The purpose of the project is to make devolved social services more effective, efficient, and equitable and achieve a major impact on the education and health status of the poor in Sindh province. The project is in ADB's 2003 pipeline of projects.

According to the local ADB office, Sindh's social sector status is among the worst in Asia. About 13 per cent of children die before the age of five, and about 10 per cent of mothers die from maternal complications.

PIA TO FLOAT RS15BN TFCS

Pakistan International Airline Corporation (PIAC) chairman Hamid Nawaz Khan has said the corporation would float Rs15 billion Term Finance Certificates (TFCs) during this week to further strengthen the financial position of the airline.

Talking to reporters after the stone-laying ceremony of PIA complex at the New Terminal Complex, he said the mark-up on the TFCs amounting to around Rs12.5 billion would be paid by the government for the next five years. He said the PIAC had already received bids from banks at home and abroad to the tune of around Rs10 billion.

MCB ISLAMIC BANKING BRANCHES

Muslim Commercial Bank Ltd will open dedicated Islamic banking branches at its selected premises to offer the entire range of Islamic mode of financing.

This was stated by head and SEVP, Corporate and Islamic Banking Group, MCB, Shoaib Qureshi, while speaking at a Haj seminar organized by the bank for pilgrims at New Haji Camp.

He said that an announcement in this regard would be made in a couple of months. "This will be a pure Islamic banking and the entire branch will deal in the Islamic way of finance," he added.

SBP ALLOWS FOREIGN PRIVATE LOAN PRE-PAYMENT

The State Bank of Pakistan is all set to bring down Pakistan's external debt liability to $35.63 billion by June next year. The State Bank has taken another initiative by allowing pre-payment of foreign private loans.

Estimated at around 2.45 billion dollars in June this year, the foreign private loans have been obtained mostly by private power operators, a few cement companies and many other private companies.

LEASING COS CAN GO FOR HOUSE FINANCING: SBP

Suggesting the leasing companies to focus on the small and medium enterprises and agriculture sectors, Governor State Bank, Dr Ishrat Hussain has clarified that the leasing companies can go for house finance or real estate leasing ventures.

Talking to the reporters, after a meeting with the Leasing Association, Dr Ishrat Hussain said that there was vast scope for the leasing companies in SMEs and agriculture especially for machinery, equipment, etc., which was direly needed in our society.