Business community to set up bank for industrial units of region: FCCI

The business community of Faisalabad is contemplating to setup its own bank to provide much needed capital to the financially starved new as well as existing industrial units of this region, said Shabbir Hussain Chawla President Faisalabad Chamber of Commerce & Industry (FCCI).
Talking to Zafar Muhammad Sheikh former Advisor, State Bank of Pakistan on Foreign exchange/Debt and Director General National Savings, he said that the industrial stagnation is a matter of serious concern. "Pakistan has failed to achieve the growth rate despite of positive macro-indicators", he said and added that government borrowing has jumped to 89 billion dollars. He said that banks also feel themselves comfortable by lending to the government. "It not only ensure the safe investment as well as secure return of their profits", he said and added that in this financial crunch the private industrial units are not getting sufficient funds to upgrade their units or introduce new technologies to compete in the post- CPEC scenario.
He said that no doubt that EXIM Bank is already working under the strict regulatory control of State Bank of Pakistan but we feel that the financial needs of the SME (Small and Medium Enterprises) sector of Faisalabad are not being fulfilled catered and they are at the mercy of the bankers who charge from them the highest rate of mark-up along with KIBOR (Karachi Inter Bank Offered Rate) which not only enhance their cost of production but also make them uncompetitive in the local market.
He also expressed concern over the widening gap between import & export and said that Faisalabad has privilege to contribute 55 percent toward the total textile export of the country but its industrial sector is facing problem in getting capital to further expand its business. Commenting on the unbridled rise in the exchange rate, he demanded that government should clamp ban on import of unnecessary and luxurious items under an act of parliament. He was critical of the fluctuation in the exchange rate of dollar and said that it is very dangerous for our fragile economy to absorb such heavy shocks. Yet another problem is flight of capital in the shape of foreign exchange from Pakistan which should be checked with an iron hand. In this connection, the private exchange companies should be tightened and a fool-proof system should be encouraged through which dollars should be brought into country instead of sending them abroad.
Justifying the establishment of a bank owned by local business community, he said that it will generate funds from its members which could be provided to the needy and honest industrialists enjoying good reputation in the market under the strict assurance of their in time repayments.