LAHORE, Dec 12: The Lahore Chamber of Commerce and Industry (LCCI) has urged the State Bank governor to take immediate measures for reduction in mark-up on industrial loans as high rate is making Pakistani goods uncompetitive in the global market.
The demand was voiced in a statement issued here on Friday by LCCI President Mian Muzaffar Ali, senior-vice president Tahir Javaid Malik and vice-president Irfan Iqbal Sheikh.
They said the mark-up rate on long- and short-term industrial loans had reportedly registered an increase of 70 to 80 per cent resultantly these loans were now being extended at 18 to 20 per cent.
They said Pakistani industry could not compete with countries like China which was charging 9.5 to 11.5 per cent mark-up on loans.
A sizeable number of industrial concerns had already closed down their operations as they could not pay back the loans procured on low interest rates, they said.
Keeping in view the fast increasing trade gap the SBP should at least put a cap on the interest rates to control the fast increasing trade deficit.
The State Bank, they said, should evolve long-term policies for extending loans to the business community in consultation with all the chambers of commerce and industry.
They said a good number of businesses had fallen prey to short-term and ad hoc policies and the SBP was required to control inflation but it continued to raise mark-up rates.
The existing 15 per cent policy rate in vogue in Pakistan had no parallel in the world, they said and added that the policy rate was 6.5 per cent in India, 6.93 per cent in China, 1.5 per cent in US, 3.75 per cent in Europe (which is planning to bring it down to one per cent), 2.5 per cent in Canada and 4.5 per cent in UK.
As the banks world over charge from 3 to 5 per cent on policy rates from the entrepreneurs, the bank mark-up for businessmen in Pakistan ranges from 18 to 20 per cent while their counterparts in India and China could obtain the same amount at 9.5 to 11.5 and 9.9 to 11.9 per cent, respectively.
fee: The Sheikhupura Chamber of Commerce & Industry will abolish commercial documents’ attestation fee and fee for getting certificate of origin while the SCCI members will be able to get membership form and membership card free of cost.
Announcing this during a meeting of the SCCI executive committee, SCCI President Mian Mohammad Yousaf said this major step had been taken to cut the cost of doing business in the country and for the sake of promotion of trade and industry.
He said the step would have a far-reaching impact and would help wear off the intensity of ongoing financial crisis.
Mr Yousaf paid rich tributes to LCCI President Mian Muzaffar Ali, senior vice-president Tahir Javed Malik, vice-president Irfan Iqbal Sheikh and LCCI executive committee members for taking the initiative for waiving various fees being charged from members.
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