Close liaison, better understanding and a practical working relationship between banks and exporters are imperative to overcome the threat posed to the global as well as national economy in the wake of Covid-19 crisis, said State Bank of Pakistan (SBP) Governor Reza Baqir.
Speaking at a meeting with Faisalabad Chamber of Commerce and Industry (FCCI) President Rana Sikandar Azam, Baqir reaffirmed that as soon as the pandemic hit Pakistan, the central bank immediately announced a refinance scheme to avoid unemployment.
"Similarly, the policy rate was slashed gradually to 7% so that liquidity problems of the small and medium enterprise (SME) sector could be resolved on a priority basis," he said. "All these steps paved the way for the revival of economy."
He pointed out that apprehensions of the business community regarding these schemes and steps were also dismissed by introducing necessary amendments.
Additionally, the central bank took steps to improve the disbursement of loans by selected commercial banks, he said.
Responding to a question, the SBP governor said refunds under the Drawback of Local Taxes and Levies (DLTL) scheme would be immediately made into the accounts of exporters on the receipt of foreign proceeds. "This process will be completed possibly within a period of one week," he declared.
Baqir assured businessmen that their problems would be resolved as early as possible.
On the occasion, FCCI President Rana Sikandar Azam appreciated the central bank governor for extending the refinance scheme for another three months and reducing the policy rate to 7%.
He added that platforms such as Zoom had provided chambers with an opportunity to immediately discuss their issues with the government departments concerned.
He listed the problems being faced by the business community due to the coronavirus-induced lockdown and the elimination of zero-rating scheme for five major export sectors.
"Exporters are facing liquidity problems as their capital is unnecessarily piling up with the government," he said. "In this scenario, they are forced to borrow capital at high mark-up from the open market to manage their day-to-day affairs, which is adding to the cost of production."
The FCCI president said under the new tax refund system, the Federal Board of Revenue provided sales tax refunds to exporters electronically by issuing Refund Payment Orders (RPOs) to the SBP within 72 hours of the submission of claims.
He lamented that the deadline to release the refunds was not followed due to which exporters were facing multiple problems. He stressed the need for making the system practically efficient. APP
Published in The Express Tribune, July 4th, 2020.
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