KARACHI: The State Bank of Pakistan (SBP) has completed the investigation against private banks allegedly involved in the USD dollar manipulation, Governor SBP Jameel Ahmad said on Wednesday.
“The central bank is going to take action against banks involved in the dollar manipulations (within their foreign exchange operations),” Jameel Ahmed said while responding to a query raised by a journalist during his visit to Federation of Pakistan Chambers of Commerce and Industry (FPCCI), on Wednesday.
“More details about the investigation will be shared with media on January 23,” he said.
Governor SBP also recommended a joint committee with FPCCI for the resolution of the huge backlog in LCs.
He said that we will discuss individual or sectoral cases in the joint committee with FPCCI.
However, he announced some broad measures to alleviate the concerns of the business community: (i) SBP will be striving to clear the backlog of approximately 11,000 cases, (ii) food products, industrial raw materials, energy producing imports and agricultural raw materials will be given priority when opening LCs, (iii) SBP will share its findings pertaining to the mismanagement of foreign exchange; and, appropriate action will be taken against commercial banks – if required (iv) he will personally interact with the FPCCI committee to reach resolutions fast.
Jameel Ahmed also informed that SBP cleared 33,000 cases in the year 2022; and, it took a lot of time, efforts and other resources of SBP. “We are expecting an enhanced inflow of dollars in the coming weeks; and, the situation would see an improvement.
The proposed committee to include four or five nominees of FPCCI’s President and, more or less, same number of SBP officials will be nominated by the governor of the central bank, he added. However, President FPCCI Irfan Iqbal Sheikh said the committee on the LC issue will be co-chaired by Suleman Chawla, SVP FPCCI, from the apex body. He advised the entire business, industry and trade community to bring their cases to the aforementioned committee. Collective voice should be raised in a broader national interest, he added.
Irfan Iqbal Sheikh explained that delays are causing a plethora of debilitating issues: detention charges, demurrages, shortages of raw materials for industrial production, closure of major industrial units, disruptions in the supplies of agricultural inputs, closure of plants due to unavailability of spare parts of the machinery & equipment, non fulfilment of export orders, loss of revenue due to dwindling production and massive layoffs.
He stressed that pending cases falling under three different categories can be resolved immediately: (i) all import consignments not involving dollar outflow should be cleared with immediate effect, (ii) SBP should come up with a crystal clear plan on what the importers can order from international suppliers to enable the business community to keep the trust of suppliers, (iii) Open Account should be completely restored, as currently, it is only good for industries for their raw materials. Mian Anjum Nisar, former President FPCCI, highlighted that there are three different markets for dollars operating in the country; with rupee to dollar rates of their own; namely, inter-bank, open market and grey market. SBP should take regulatory action against commercial banks for speculative trading and causing unbearable losses to the businessmen, he added.
Copyright Business Recorder, 2023