Businessmen urge SBP to bring mark-up rate to single digit

RECORDER REPORT

KARACHI: The business community has urged the State Bank of Pakistan (SBP) to announce a reduction in the markup rate and bring it in single digit in the forthcoming Monetary Policy.

They said that markup rates in Pakistan were too high as compared to the others countries in the region.

They said that the availability of cheaper money would reduce cost of doing business which was extremely high in Pakistan.

They said cut in markup rates would not only strengthen economic activities but would also go a long way in controlling stagflation that was giving birth to many other economy related problems besides jacking up the graph of unemployment and resultant surge in crimes.

They said the heavy government’s borrowing at the cost of the growth of private sector was hampering the growth. In such a situation the private and industrial sector should have been provided relief by SBP and policy rate should be cut up to a single digit.

They said that high discount rate had been causing a great harm to economy and would continue to do so unless and until a realist approach was adopted.

Leader of business community and former President FPCCI S M Muneer said SBP statistics revealed that an incremental of 10 percent or Rs56.54 billion had been witnessed in total NPLs of banking industry during CY11, said a report monitored here.

With current increase, cumulative NPLs of banks and DFIs mounted to Rs 623.193 billion as on December 31, 2011 compared with Rs566.645 billion as on December 31, 2010.

This is extremely serious situation and also a threat to the banking industry.

He said that in such a grim situation how the industries that were struggling for their survival could bear high markup rate.

The industry’s representatives have earnestly demanded of the SBP Governor to bring the bank rate into single digit.

Korangi Association of Trade and Industry (KATI) Chairman Ehtesham Uddin, President All Karachi Industrial Alliance (AKIA) Mian Zahid Hussain, Vice Chairmen Hasham A Razzak, Tariq Malik and prominent industrialist Syed Johar Ali Qandhari said that SBP was scheduled to announce Monetary Policy on August 10, and Governor SBP Yasin Anwar should reduce bank interest significantly as markup rate in Pakistan were still highest in the region.

They said that due to high markup rates in Pakistan, industry was suffering badly and the volume of non-performing loans was increasing alarmingly.