FAISALABAD: Disgruntled by attitude of local banks, the business community of Faisalabad is considering setting up its own bank for provision of capital to its existing and new industrial units in the region.
This was stated by Shabbir Hussain Chawla, President Faisalabad Chamber of Commerce and Industry (FCCI) while talking to ex-advisor State Bank of Pakistan on foreign exchange/debt, Zafar Muhammad Sheikh, reported Business Recorder.
Mr. Chawla expressed serious reservations over industrial stagnation while talking to Mr. Sheikh. He stated that Pakistan had been unable to attain the growth rate despite positive macro-indicators and government borrowing had escalated to $89 billion.
Mr. Chawla added local bank felt secure in lending to the government because not only was it safe investment but also guaranteed secure return of their profits.
He said industrial units were financially depraved and weren’t getting enough funding for upgradation of their units and enable to bring new technologies to compete in post-CPEC scenario.
Also, Mr. Chawla said Exim bank was already conducting its operations under stringent regulatory control of the central bank, but funding needs of small medium enterprises (SMEs) sector of Faisalabad weren’t being met and catered to.
He added they were at the mercy of bankers, who were charging exorbitant mark-up alongside KIBOR (Karachi Inter-Bank Offered Rate), which not only increased their production cost but made them uncompetitive in domestic market.
President FCCI shared his worries over the rising gap between exports and imports. He stated Faisalabad was honoured to be contributing 55 percent toward the total textile import of Pakistan.
Mr. Chawla highlighted the industrial sector was affront with issues in attaining capital, which was hampering their ability to expand their businesses.
Furthermore, he was severely critical of the exchange rate fluctuation, which he said was very threatening for the economy to digest such heavy shocks. FCCI president requested the government to accelerate ban on import of luxury items.
He backed the establishment of a bank owned by local business community and stated it will produce funds from its members which could be utilized to provide assistance to needy and honest industrialists having good repute in the market.
