ISLAMABAD: The State Bank of Pakistan (SBP) has informed a meeting of the Senate Standing Committee on Finance that the primary objective of Export Import Bank (EXIM) Bank is to expand and diversify the export base of the country and mitigate the risks that local businesses face in international trade.
A brief put up to the committee by the SBP stated that the EXIM Bank will provide short-term export credit (pre and post shipment) long-term financing guarantees, export credit insurance and other supporting services to the exporters under the regulatory authority of SBP.
As per today paid-up capital of the bank is Rs10 billion as required under EXIM Bank Act 2022. The federal government subscribed Rs9 billion while Rs1 billion has been transferred from retained earnings upon the advice of the federal government.
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The meeting was also informed that the Board of Directors (BoD) of the bank is required to consist of seven members including four ex-officio directors and three independent directors from private sectors that are to be appointed by the federal government. The federal government is required to be nominated BoD members.
The EXIM Bank has applied to the SBP to allow them formal commencement of business as the bank has planned to start the operations in a three phases manner. In the first phase, the bank will introduce Export Credit Insurance products to the exporters while in the second phase, lending products and trade guarantee products will be introduced and in the final phase Islamic financing products will be introduced.
The standing committee was further told that to assess the overall preparedness a short inspection of EXIM Bank was conducted by SBP.
Currently, the SBP is engaged with EXIM Bank on the issues such as deficiencies in existing IT infrastructure in terms of its integration. cyber security measures and absence of Core Banking System besides deployment of internal controls mechanism.
The establishment Export Import Bank of Pakistan (EXIM Bank) is fully owned by government and it was incorporated on June 11, 2015 under the Companies Ordinance. 1984.
Subsequently, on December 31, 2015, the government notified EXIM Bank as a Development Financial Institution (DFI) under Banking Companies Ordinance (BCO) 1962 for operationalisation of EXIM Bank, whereas, Export Import Bank of Pakistan Act 2021 was enacted in October 2022.
On February 13, 2023, the Finance Division notified EXIM Bank as a financial institution under BCO, 1962 and transferred whole of the undertakings of EXIM Bank of Pakistan Limited to new entity EXIM Bank of Pakistan through notifications.
Copyright Business Recorder, 2023