SBP to provide 1-year 'relief' on loans to textile industrialists

[Naveed Yaseen]

By Shahid Shah

KARACHI: The State Bank of Pakistan (SBP) has agreed to provide a 12-month moratorium on long-term loans to textile industrialists.

This will allow the industrialists breathing space without paying principal amount of loans to banks for one year at the time of global recession.

State Bank governor assured the federal adviser on textiles that banks were ready for a loan moratorium, and the adviser was in a meeting with Prime Minister Yousuf Raza Gilani in Islamabad on Wednesday.

Adviser to the PM on Textile Industry Dr Mirza Ikhtiar Baig told The News that the 12-month moratorium would help the industrialists, who were facing big problems after an increase in mark-up. The meeting continued for half an hour.

Dr Baig said he requested the prime minister for some immediate relief for the textile sector, especially a moratorium on payment of principal amount of long-term loans and reduction in mark-up.

He also apprised the prime minister of his meeting with the State Bank governor on these issues.

During the meeting, the prime minister called the SBP governor, who after conversation with the PM informed the textile adviser that he had met with presidents of major banks regarding moratorium on payment of long-term loans for one year.

The governor told Dr Baig that banks were willing to ease long-term loan installments. “We asked for a moratorium for 18 months but the governor agreed on 12 months,” the adviser said.

The governor did not give any statement to cut the mark-up but said that due to substantial inflow of funds the liquidity of banks had improved considerably which would bring down mark-up automatically in the near future.

Dr Baig asked the governor to take up the matter with Secretary Finance, Islamabad, regarding payment of R&D claims on shipments made up to June 30, 2008 and three per cent interest disbursement to the spinning sector by the SBP and the finance ministry had assured it would send instructions for payment on both accounts within three to four days.

Talking to The News, he said that the prime minister wanted to bail out the textile industry and said that the problems of the industry would be taken on priority basis.

http://www.thenews.com.pk/daily_detail.asp?id=158340