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Wednesday, 5 September, 2012
‘IndIa, PakIstan to sIgn three agreements soon’ Agreements include customs co-operation, trade grievances redressal and mutual recognition
to Pakistan, the Commerce Secretaries of India and Pakistan will meet in Islamabad. This will be another opportunity to take more steps,” he said while addressing a lunch meeting organized for a visiting delegation of Members of Parliament from Pakistan. The meeting was organized by the Federation of Indian Chambers of Commerce and Industry (FICCI). Sharma felt that the recent decision of the Indian Government to reduce the
sensitive list by 30 per cent under the South Asia Free Trade Agreement would benefit Pakistan. He said that the decision covered all sectors that were important to Pakistan. India and Pakistan need to encourage trade by the land route, which currently was very small, he added. The Minister said that India had proposed opening of the land route for trade along the SialkotHussenewala border in Punjab and the MunabaoKhokharapar rail route. It is also proposed that both countries would meet soon to work out a strategy on connectivity by linking each other’s Capitals by air. At present, Mumbai is linked with Karachi and Delhi with Lahore. Sharma also mentioned that banks from both countries were also planning to open branches in each other’s lands. Conceding that problems do exist, Sharma said that while he was not trying to simplify anything, it was imperative that irrespective of the issues there must be “maturity, wisdom and will” to overcome challenges that come in the way of building a durable partnership between India and Pakistan.
related significance due to its capability to grow in different atmospheric and soil conditions and Pakistan produces 468,300 tonnes of the fruit per annum. Agriculture experts have urged growers to complete the process of planting new guava plants in the month of September preferably at soft and fertile land for enhanced production. Botanical growth of the fruit is usually supported by grafting. Experts said that grafting in monsoon season should be shifted to plastic bags in a greenhouse. A mixture of soil, soil from canal and organic fertilisers be put in the bags and the bags be shifted to a shed after three months. Water be applied soon after the shifting and the distance between two plants should be six metres. Small plants should get water regularly after short durations throughout the year, however, grown up plants need more water at the time of fruit formation, they added. Adult guava plants must be saved from a pest
attack through precautionary and curative measures. White-fly can damage the fruit and growers must consult experts in case of a white-fly attack or other diseases, they added.
NEW DELHI
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INP
NDIA and Pakistan will soon sign three agreements on customs co-operation, trade grievances redressal and mutual recognition, Commerce and Industry Minister Anand Sharma said on Tuesday. “It is a matter of weeks, maximum. There have been delays in visits. There have been changes in the Pakistan Administration. The Commerce Secretaries should have met three months ago. I am told that after the visit of the Indian External Affairs Minister
Going great guavas! ‘Pakistan produces 468,300 ton guava annually’ MULTAN APP
Guava is cultivated at 58,500 hectares in the four provinces of the country. According to a press release issued by the media liaison unit of the Punjab agriculture department on Tuesday, guava has attained trade
Automobile production drives on ISLAMABAD APP
Despite energy crisis and other related challenges, the automobile industry of the country performed well as its production increased during the fiscal year 2011-12 as compared to the previous year. Among the automobile sector, the production of jeeps and cars increased by 14.72 percent during the fiscal year (2011-12) as compared to the same period of previous year, according to the official data. The overall production of jeeps and cars was recorded at 154,706 units during July-June (2011-12) against the production of 134,855 units during July- June (2010-11), data of Pakistan Bureau of Statistics revealed. During the period under review, the production of Light Commercial Vehicles (LCVs) also increased by 9.34 percent by going up from 19,142 units during 201011 to 20,929 units during 2011-12. Production of busses also increased from 490 units to 568 units, showing growth of 15.92 percent. However, the output of Trucks and Tractors decreased by 7.56 percent and 32.04 percent respectively. The production of trucks decreased from 2,810 units in 2010-11 to 2,597 units in 2011-12 while the production of tractors declined from 70,855 units to 48,152 units. The production of motorcycles increased by 0.43 percent by growing from 1,628,457 units in 2010-11 to 1,645,520 units in 2011-12, the data revealed. Meanwhile, during the month of June 2012, the production of cars and jeeps surged by 47.29 percent as it jumped from the output of 10,743 units in June 2011 to 15,823 units in June 2012. The production of LCV’s increased by 10.86 percent to reach 1,970 units during June 2012 as compared to the production of 1,777 units in June 2011. Production of busses, trucks and tractors increased by 46.67 percent, 140.20 percent and 21 percent respectively during June 2012 over the same month of last year. However, the production of motorcycles witnessed 10.20 negative growth by falling from the production of 149,265 units in 2011 to 134,026 units in 2012, the data revealed. It is pertinent to mention here that the country’s large scale manufacturing (LSM) witnessed growth of 1.17 percent during the financial year 2011-12 as compared to the growth of last fiscal year. Growth of 0.75 percent was witnessed in the indices of Provincial Board of Statistics that increased from 124.83 in 2010-11 to 128.63 during the year under review. Similarly, the indices of Ministry of Industries and Production increased from 109.87 points to 111.04 points, showing an increase of 0.74 percent. However, the indices of OCAC witnessed negative growth of 0.32 percent as it declined from 83.27 points to 78.60 points.
SBP’S TWO-PRONGED TRIUMPH SBP’s 5-year plan to expand Islamic banking KARACHI STAFF REPORT
State Bank of Pakistan (SBP) Deputy Governor Kazi Abdul Muktadir on Tuesday said the central bank was developing a new five-year (2013-17) strategic plan for Islamic banking industry. “The new plan will set the strategic direction for the Islamic banking industry. This would define the strategies and action plans to move the industry to the next level of growth and SBP would expect active and meaningful involvement of the industry in development of the plan,” Muktadir said while addressing the Islamic Finance News (IFN) Roadshow–2012 held here at the SBP’s Learning Resource Centre (LRC). He said the Islamic finance industry is likely to increase its share in the banking system to 15 percent during next five years. Growing from scratch in 2002, he said that Islamic banking now constitutes over 8 percent of the country’s banking system with a network of 964 branches and over 500 windows across the country. ‘Encouragingly, the sustained growth of Islamic banking in the country during the last decade has also started catalyzing growth and development of Islamic capital markets, Mutual funds and Takaful companies etc. Presently, we have 5 Takaful operators, about 30 Islamic mutual funds,’ he added. Muktadir disclosed that the State Bank was also developing a comprehensive Shariah Governance framework to further strengthen the Shariah governance in Islamic Banking Institutions (IBIs) and added that the framework will explicitly define the roles and responsibilities of different organs of IBIs including the Board of Directors, Shariah Advisors/Committees and Executive Management for ensuring Shariah compliance. He said the SBP had developed a comprehensive profit distribution and pool management framework in consultation with
Regulator also developing a comprehensive Shariah Governance framework in IBIs g Sovereign Sukuk of $4bn during last two years largely addressed liquidity management issue of Islamic banks g Global Islamic banking industry has swelled to $1.35 trillion with an annual growth rate of over 20 percent g
the industry and added that the framework will be issued most probably within this month. Muktadir said sovereign Sukuk of Rs.369 billion ($ 4 billion approx) were issued during last two years that have largely addressed the liquidity management issue of the Islamic banking industry. ‘The regular issuance of the Sukuk, almost on quarterly basis, has improved market confidence and tradability of the Sukuk,’ he added. He said the central ban had been taking initiatives to strengthen the legal, regulatory and Shariah compliance framework, create awareness amongst the masses and build the Islamic banking industry’s Human Resource capacity. Muktadir said SBP would soon be launching a mass media campaign to create awareness about Islamic banking. “The campaign we believe will be instrumental in enhancing public awareness and would give further boost to the growth momentum of Islamic banking industry,” he added.
Conducting auctions of Turkish Lira loan facility KARACHI STAFF REPORT
The implementation of three-year bilateral Currency Swap Arrangement (CSA) between the State Bank of Pakistan (SBP) and the Central Bank of Republic of Turkey (CBRT) amounting to $ 1 billion in equivalent local currencies began yesterday. To this effect, the SBP has issued necessary instructions to the banks for its implementation after due consultations with various stakeholders and completion of operational formalities with CBRT. A bilateral CSA was signed between SBP and CBRT by SBP Governor Yaseen Anwar and CBRT Governor Erdem Baþçý in the presence of presidents of the two countries in November last year. The objective of the currency swap is to promote bilateral trade between the two countries in the respective local currencies and any ‘other’ purpose as mutually agreed between the two central banks. Since the CSA is a bilateral financial transaction, all terms and conditions apply equally to both countries and the pricing is based on standard market benchmarks which are widely acceptable in the respective domestic markets. The CSA between the two central banks would give a positive signal to the market on the availability of liquidity of other country’s currency in the onshore market. The arrangement would augment the pool of liquidity available to finance bilateral trade between the two countries, supplementing the already available sources of liquidity. By virtue of this arrangement, SBP would have the ability to draw on the swap line and provide Turkish Lira (TRY) to banks in Pakistan. The banks would on-lend this liquidity to importers/exporters involved in trade denominated in TRY. At maturity, the importer/exporter would repay the foreign currency to the lending bank which in turn would repay to the respective central bank. In order to ensure transparency in determination of market interest
rates, the SBP has decided to conduct competitive auctions of TRY Loan Facility as under: All commercial banks would be allowed to take FE-25 deposits and extend FE-25 loans in TRY for financing of imports/exports in accordance with the SBP’s prevailing instructions on FE-25 loans/deposits. Necessary instructions to that effect have been issued vide FE Circular No. 4 on Tuesday. To provide TRY funding to scheduled banks so that they can on-lend the TRY to traders with underlying trade documents in TRY, SBP would conduct competitive auctions of TRY Loan Facility using proceeds drawn under the CSA with CBRT. Participation in auctions would be dependent on the submission of documentary evidence of export or import bills denominated in TRY, SBP would conduct ‘uniform price’ competitive TRY auctions in three and six month tenors. All scheduled banks would be eligible to participate in such auctions. Further details on the utilization of TRY in Pakistan on account of PKR/TRY swap are as follows: a) Importers with underlying trade documents denominated in TRY: On the maturity date of the letter of credit (LC), the importer would pay off the overseas supplier by borrowing in TRY. Assuming borrowing is for 6 months, the importer would save on the rupee cost and after six months the importer would buy TRY against PKR and pay off the TRY loan. Availability of onshore TRY financing would encourage importers to open TRY denominated LCs. b) Exporters with underlying trade documents denominated in TRY: Once the contract is established, the exporter would borrow in TRY, sell TRY against PKR and utilize PKR for its local operations. On the maturity date of the contract, the exporter would receive TRY from the overseas buyer and payoff the TRY loan locally. All banks are expected to educate their customers on the additional option of denominating their Trade documents in TRY. SBP would encourage banks to hold sessions with local trade bodies.