Alleviating Concerns: SBP Management Visits OICCI for Interactive Session with Members

The Overseas Investors Chamber of Commerce and Industry (OICCI) members met with Dr. Murtaza Syed, Acting Governor, State Bank of Pakistan (SBP), Dr. Inayat Hussain, Deputy Governor, SBP and Sima Kamil, Deputy Governor, SBP for a discussion on urgent fiscal and monetary policy measures that need to be taken to help stabilize Pakistan’s economy.

Ghias Khan, President OICCI and Abdul Aleem, Secretary General, OICCI led the discussions and raised member concerns related to the pre-approval procedure of LCs for import of machinery and spare parts, timely remittance payments, approval exemptions of shipping values being too low, and other operational issues. It was stressed upon the SBP leadership to set timelines so that industry supply chain is not compromised.

The SBP team gave a comprehensive overview of the current economic situation and the planned strategy to tackle issues in 2023. Pakistan is primarily a consumer-driven economy with consumption driving up to 95% of the GDP. The SBP team was confident that Pakistan’s problems were temporary and urged the OICCI members to work on improving exports to help balance the exchange rate fluctuations and currency depreciation.

Ghias Khan stated, “This meeting was a much needed first step towards the recovery of Pakistan’s economy. It is imperative that we implement cogent measures to halt our pattern of circular debt. The SBP has always played a critical role in stabilizing Pakistan’s economy, and I am confident that under Dr. Murtaza Syed’s leadership we will be able to withstand the current economic climate while charting a path for growth.”

Dr. Murtaza Syed commented, “SBP is taking tough measures and making difficult decisions to help avert the economic crisis. Global inflationary pressures coupled with a procyclical expansionary fiscal policy during a pro-cyclical period is one of the main reasons Pakistan is at this crossroads today. Once these measures are implemented and the IMF loan is received, the pressures on the economy will ease, specifically with regards to the depreciating Rupee.”

OICCI serves as a platform to promote foreign investments and plays a major role in the growth of commerce and industry in the country. Collectively, OICCI invested USD 2.4 billion last year, contributing one-third of the country’s total tax collections.

SBP enhances agriculture credit limits to meet farmers input requirements

State Bank of Pakistan (SBP) has enhanced the indicative credit limits for agriculture financing by banks to farmers to align the amount of financing with agriculture input requirements. The enhanced indicative credit limits for production and development loans of farm and non-farm sector will directly benefit agriculture borrowers, who will now be able to obtain more credit from banks and in turn enhance agriculture productivity through adequate use of inputs.

This will also enable banks to align the loan amounts with the actual requirements of farmers and resultantly enhance flow of agriculture credit.

It is important to note that the indicative credit limits serve as a guideline for banks to assess the credit requirements of agriculture borrowers while sanctioning credit limits. Banks may, however, make adjustments on the basis of prevailing market conditions, local prices of inputs, and repayment capacity of borrowers.

The revised indicative credit limits will also facilitate provincial planning departments in estimating the total financial and credit requirements of respective provinces/regions for farm and non-farm sectors.
For more details, please visit SBP website: https://www.sbp.org.pk/acd/2022/C1.htm

Supernet Ltd obtains SBP contract worth Rs100mn

Telecard Limited’s 100% owned subsidiary, Supernet Limited (“Supernet”), has been awarded a contract by the State Bank of Pakistan (“SBP”) in IT and Cyber Security domain worth close to PKR 100 million according to a filing at the PSX. This contract involves supply, installation, maintenance and technical support of Next Generation Intrusion Detection and Protection Systems (“IDPS”) to secure SBP Infrastructure from Advance Persistent Threats (“APT”).

This IDPS solution will provide SBP with state-of-the-art deduction of vulnerable exploits and unidentified treats originating against any targeted system, applications or hardware. In addition, the IDPS will provide remedial measures, as and when any malicious behavior is detected. This solution will operate by scanning all network traffic on SBP’s gateways detecting and protecting against threats like DoS, DDoS, Worms and viruses, additionally, creating a 2nd layer of defense to SBP’s security framework.

It may be relevant to point out that the SBP has maintained the highest possible standards for vendor selection, amidst stiff technical evaluative process and Supernet’s emergence as successful bidder is a testament that it has the capability and capacity to undertake this project, paving the way for similar contracts in this sensitive cybersecurity domain within the financial sector.

Good News : Telecom sector generated $127 million FDI during last 11 months

According to a recent update by State Bank of Pakistan the telecom sector has grasped nearly $126.9 million Foreign Direct Investment (FDI) during the last 11 months from July to May 2014-15. Apart this the entire level of imports have been raised by 10.37 percent during the same period of time as compared to the preceding year.

More precisely, the imports of telecom stood at $1.265 billion against the imports of $1.146 billion in July-May 2014-15.

The mobile technology imports in the country have raised by 15.86% as compare to preceding year and the whole imports increased around $653.808 million up from $564.293 million in the same period last year, according to the Pakistan Bureau of Statistics.

The report of SBP states that the “cellular operators are rolling a range of new products for their customers since the spectrum auction of 3G/4G licenses in April 2014 and are also investing for the up-gradation of their systems and network which resulted in an increase in foreign direct investment and a surge in telecom imports”.

The report further reveals that:

The performance of PTCL also remained weak during the first half of FY15. Additional cost incurred on voluntary separation scheme brought down the operating profits from Rs8.6 billion at end-June 2014 to Rs4.5bn by end of Dec 31, 2014.

The overall commenters clearly Telecom sector is now meeting growth while the recent budget 2015-2016 by the government of Pakistan doubles the taxes on mobile phones, it is scary that enhanced growth is likely to be hampered.

However the move to withdraw 19.5% GST on all types of interest services is certainly a positive step from the Government of Punjab. Apart this Telecom sectors are in mood to convince Khyber Pakhtunkhwa (KPK) and Sindh governments to remove the general sales tax (GST) on data service and broadband Internet, in case they meet the success, the country can move towards digital growth.