The government has fulfilled another condition of the International Monetary Fund (IMF) for the revival of the bailout package as it got the bill backing the establishment of the Export-Import Bank of Pakistan passed from the National Assembly just ahead of the budget session.
The IMF-backed export-import bank was one of the conditions of the global money lender for putting the monetary program back on track. The government complied by passing the bill from the lower house of the parliament in no time.
Through the Export-Import (EXIM) Bank of Pakistan Act, 2022, the federal government shall by an order transfer to the bank the whole of the undertakings of the existing Exim bank.
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The order will transfer all the assets, rights, powers, authorities, privileges and all properties, cash, bank balance, reserve funds, investments, and all other interests and rights, debts, liabilities and obligations of the existing bank to the new one.
The bill says that the share capital of the bank shall be one hundred billion rupees and the initial paid-up capital of the bank shall be 10 billion rupees divided into one billion fully paid-up shares at par value. The bank can borrow in local and foreign currency.
The purpose of the bank is to support, promote and develop international trade, and trade investments as well as to promote export-oriented import-substituting businesses in accordance with the provisions of the act and the national trade policies and programs of the federal government.
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According to the statement of object and reasons, the government of Pakistan is now seeking to establish the Export-Import Bank, as the national export credit agency.
It said that the bank will do promotion, expansion and diversification of international trade by providing credit, guarantee and insurance products as well as ancillary services to exporters and importers, in the form of a statutory corporation that the backing and support of the government of Pakistan as is customary for export credit agencies to achieve their desired potential and objectives.
Through section 25 (sovereign guarantee), the federal government guarantees all liabilities and obligations of the bank in relation to its business, subject to such limits on the amount and validity period of the sovereign guarantee as may, from time to time, be notified by the federal government.
Section 26 (regulatory authority) says that the bank shall be subject to regulatory supervision by the State Bank of Pakistan (SBP)
Under section 28, the bank will furnish a performance report with respect to the implementation of the national trade policies and programs of the federal government by the bank at the end of each financial year through the Ministry of Finance.
Under section 29, the strategic policy directions will come from the federal government if it is of the opinion that the bank is carrying out its business, operations and activities in a manner that is inconsistent with the national trade policies and programs.
Section 32 (review and report to parliament) states that the federal government shall review or cause the review of the act, bank and its activities after three years of the date of commencement and every five years thereafter.
It states that the federal government shall submit a report on the review to both houses of parliament for consideration within one year after the review is undertaken.
Section 36 (exemption from taxes) states that any law for the time being in force relating to wealth tax, income tax, super tax, sales tax, excise tax or any other tax, the Bank shall not be liable to any such taxes on its income, wealth or services.
Section 37 (protection of actions taken in good faith) of the bill says that no suit, prosecution, reference, or other legal proceedings, shall lie against the bank, its board, chairman, the president or any other director, officer, employees, advisors, consultants or experts for any omission, interpretation or determination done in good faith.
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