Banking channel to help increase trade with Iran: Wathra

Governor State Bank of Pakistan (SBP) Ashraf Mehmood Wathra has said on Monday that banking channel between Pakistan and Iran will be established soon that would help increase bilateral trade between the two countries. "All arrangements for establishment of this banking channel between Pakistan and Iran have been finalised and the central banks of both countries will sign an accord in this regard soon," he said speaking at Karachi Chamber of Commerce and Industries (KCCI) during his visit on Monday.
Wathra said that SBP is giving priority to promote branchless banking in the country. He said the limit of transaction through easy paisa etc would be increased from Rs 50,000 to Rs 100,000 after next budget. He said currently withholding tax is imposed on over Rs 50,000 bank transactions and the government is expected to exempt withholding tax for up to Rs 100,000 transactions in the next budget.
He said that the central bank was focusing on enhancement of financing to SME sector. However, the number of borrowers is very low. He said that out of total 3 million SMEs, there are only 180,000 bank borrowers. He said the central bank has made financial inclusion its basic strategy. All the banks have been directed to provide financial services to the areas where such facilities are not available.
"Agriculture sector is very important that contributes 20 percent to the country's GDP," he said, adding that efforts were underway to provide 'formal farms credit' to farmers. The SBP governor said that the credit off-take to the agriculture sector has increased to Rs 598 billion by year 2016.
He said Islamic banking industry is growing rapidly in the country as the assets and deposits of the Islamic Banking have increased tremendously. Commenting about Export Refinance Scheme, he stressed the need for changing current export model. He said the current export model was made in 1950s and 1960s. It was suitable for that time and there is need to change this export model. He said there are many concessional credit schemes which remained untapped mainly due to lack of knowledge.
He said the concept of EXIM Bank is in advanced stages and Asian Development Bank's technical assistance is being sought in this regard. Former President KCCI and Group Chairman Siraj Kassim, incumbent President KCCI Shamim Ahmed Firpo, Anjum Nisar and others also spoke and discussed various issues.