Daniyal proposes amendment in Loans for Agriculture, Commercial and Industrial Purposes Act 1973

ISLAMABAD: Minister for Privatisation Daniyal Aziz stressed the need for revisiting the Loans for Agriculture, Commercial and Industrial Purposes Act 1973, which was restricted with only agriculture loaning.

Chairing a meeting, the minister noted during the meeting that the deposit base of the banks was fast growing whereas the lending is restricted with the agriculture loaning, the minister called for enhancing banking sector outreach in the rural areas of the country in order to ensure easy access to credit facility for the people living in underprivileged and far flung areas of the country.

The Minister also asked for extending the credit outreach facility for other sectors and it should not be merely restricted to agriculture or farming.

The Minister stressed the need for revisiting the Loans for Agriculture, Commercial and Industrial Purposes Act 1973, which was restricted with only agriculture loaning on the basis of PIU and ASV.

It may be recalled that the cabinet has formed an inter-ministerial Committee headed by Minister for Privatisation to propose amendment in the above mentioned act. The Minister asked the financial institutions for extending their credit facilities to allied industries for a balanced economic growth and development in the country.

The Federal Minister suggested that the banks for considering the provision of credit on basis of disposable income instead of using typical methodology.

Meanwhile, the representative of the NBP informed that the total agriculture loan portfolio stood at Rs 50 bln, whereas it was providing credit facilities to about 260K farmers across the country.

The representative of HBL said that HBL lend 34bn rupees to the farmer under its agriculture loan program at 11% interest rate.

Senior officials from SBP, National Bank, ZTBL, Ministry of Finance and HBL attended the meeting.

The representatives of the financial institutions appreciated and welcomed the Minister’s proposals regarding the revamping and revisiting of the Act.

They were of the view that the amendment in the subject rule would enable the banking sector to extend its outreach to other sectors of the national economy for a balanced growth and multifaceted progress.