ISLAMABAD This refers to erroneous reporting, perhaps due to an error in the minutes of the meeting floated by the concerned ministry, and published in Business Recorder on February 15th titled ‘PALSP told to talk with SBP, and Finance Division’.
To clarify the facts, the Pakistan Association of Large Steel Producers categorically states that it has not asked for any kind of help from the Govt for restructuring or re-profiling of loans. No such request has been made. Our association believes that the Banks have the discretion to re-profile / restructure loan of any industry or to refuse any such specific request, be it steel or other industries, on merit after fulfilling banking rules & regulations’.
However, currently due to extremely difficult economic conditions in the country far worst than Covid times, and especially due to sky high interest rates, highest power rates, and slump in demand due to low construction activity, some industries from any industrial sector might face a difficult situation and may not be able to service their loans. In that case, still, it would be a matter between the Bank and the industry, and the government has got nothing to do in it.
As a responsible association, and seeing the larger economic interests of the country, yes PALSP did request to the Govt that in case any bank agrees to re-profile or re-structure loan of any specific industry purely on merit, in that case, the matter may not be reported in eCIB of the State Bank for a period of 2 years.
Regarding power sector related matters, PALSP appreciated Govt/ Power Division’s proposition of reducing power rates to 9 (US) Cents for the entire industry and across the board. If approved, this will give big boost to the local industry of the country.
However, in a previous correspondence with the government, PALSP expressed opposition to any suggestions for establishing a separate category of subsidized power rates exclusively for zero-rated export sectors.
This stance is rooted in the recognition that when such subsidies are allocated selectively to specific industries, it places an additional burden on the broader industrial sector across the country. Moreover, it tends to incentivize investors to favor particular industries over others, potentially overlooking more efficient and burgeoning sectors with equal potential for export growth and import substitution.
Copyright Business Recorder, 2024