The Lahore Chamber of Commerce and Industry (LCCI) on Friday urged the Governor State Bank to take immediate measures for bringing down the rate of mark-up on industrial loans, as the high interest rate is not only creating troubles for industrialists but also making Pakistani goods non-competitive in the global market.
LCCI President Shahid Hassan Sheikh, Senior Vice President Yaqoob Tahir Izhar and Vice President Mubasher Sheikh, in a statement, said that a large number of industrialists had already closed down their operations, as they could not be able to pay back the loans they got on low interest rates.
They said that keeping view the fast increasing trade gap the SBP, at least, should put a cap on the interest rates as boost to exports is only way to control the fast widening trade deficit.
They suggested that the State Bank of Pakistan in consultation with all the Chambers in the country should evolve long-term policies for extending loans to the business community, as it has been proven that a large number of businesses had fallen prey to short-term and ad hoc policies.
The office-bearers said that the rate of mark up on long-term, short-term industrial loans had reportedly registered an increase of 70 to 80 percent resultantly these loans are now being extended at 16 to 18 percent which were available on 10 to 12 percent only a few months ago.
They said that during this period, the financial institutions made a huge profit at the cost of industrial segment of the society. When China is extending loans to its industry at 4 to 5 percent mark-up in this condition how Pakistani industrialists could compete them in the global market, they added.
They said that all the times, the mark-up rate is increased under the pretext of high inflation while controlling the inflation is not the job of industrialists but it is purely State Bank of Pakistan's responsibility, which is playing the role of a silent spectator.
While quoting the example of GDP growth in China and India, the LCCI office bearers said that the government should provide level-playing field to Pakistani manufacturers so that they could be able to earn much needed foreign exchange for the country.
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