Businessmen urge SBP to control inflation

[Naveed Yaseen]

By Moonis Ahmed

KARACHI: Business community has urged the central bank and the government to control rising inflation. “It has become impossible for common man to make both ends meet in the meager amount of Rs 6,000, minimum pay scale fixed by the government for salaried person,” the KCCI chief Siraj Kassam Teli said. Addressing a luncheon meeting given in honour of Governor SBP, Syed Saleem Raza, he said the poverty has increased manifold in the country such that a four-member family is unable to survive in the minimum pay scale set by the government. He showed concern over the way SBP is controlling inflation. He was of the view that if discount rate for the industry had been reduced earlier then the industry would have been in a better condition now. “Although there has been some changes as discount rate was reduced to 13 percent, but as compared to rest of the competitive countries it’s still really high”, he maintained. He said that the since the time of former finance minister Shaukat Aziz, the industry has been relentlessly pointing out all the problems but “unfortunately, no finance minister has ever been successful in impressing the business community.” Earlier, president KCCI Abdul Majid Haji Muhammad said that due to inflation the SBP raised the discount rate which has further slowed down the private borrowing and reduced private investment. The current account deficit, although reduced due to substantial support from IMF, still posses a threat to the macro economy. He further demanded the government to provide KCCI representation in the Board of Directors of State Bank of Pakistan. He also demanded the government to take concrete measures to bring the inflation to single digit and also reduce the interest rates. Pointing out banks excessive charging, he said that commercial banks are charging very high from their customers especially under the head of opening of letter of credit LC, account opening, intercity transactions etc. Small traders and general public are truly suffering from the imposition of these injustice charges. He also urged SBP to devise a comprehensive strategy while consulting the stakeholders and assure enhancement to private investment by lowering the cost of borrowing of capital and direct to commercial bank authorities to reduce transactions cost, services changes and other hidden and non-hidden costs for private sector. Ateeq-ur-Rehman, Chairman, banking and insurance committee said that monetary policy should be made with consultations of KCCI. He said that there must be provision of soft loans for SMEs on trust and without collateral. He also urged for the corporate governance for commercial banks and further involvement of commercial banks in philanthropy, as it is their corporate social responsibility (CSR).

http://www.dailytimes.com.pk/default.asp...2009_pg5_2