ISLAMABAD: The documented steel sector has asked the Ministry of Finance and the State Bank of Pakistan (SBP) to urgently instruct commercial banks to also prioritise LCs for raw materials of steel sector and includes the same in “EPD Circular” Letter No 20 of 2022.

According to a communication of Pakistan Association of Large Steel Producers (PALSP) to the Ministry of Finance and the SBP, the SBP via EPD Circular Letter No 20 has instructed banks to prioritise/facilitate imports of various categories but surprisingly excluded raw material of steel (HS codes 7204 & 7202) that only accounts for meager 2.6 percent during Jan-Oct 2022 (source: SBP import publication data) in the country’s total import bill but this $ 150 million monthly outlay acts as the backbone of entire construction industry & infrastructure projects.

Steel sector: Amended finance bill may restore turnover tax adjustment

The imminent shutdown of large steel manufacturers as banks are now refraining from establishing their raw material LCs will not only halt infrastructure projects of national importance but also cause domino effect on allied industries including cement and building material resulting in massive unemployment as well as Non-Performing Loans for the banking sector.

Given the gravity of the situation, you are kindly requested to urgently instruct commercial banks to also prioritize LCs for raw material of steel sector and include the same in EPD Circular Letter No 20 of 2022, the documented steel sector added.

Copyright Business Recorder, 2022