ISLAMABAD: Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, has emphasized that the revival of the Export and Import (EXIM) Bank is a top priority for the government, citing its critical role in fostering export-led economic growth.
Briefing the Senate Standing Committee on Finance on Monday, the minister underscored the bank’s potential to enhance the country’s exports over the next two to three years. He noted that the government’s prudent policies have set Pakistan on a path to economic stability. “The policy rate has been reduced by 9 basis points, and the Karachi Interbank Offered Rate (KIBOR) has dropped below 12%, cutting borrowing costs in half,” he said, adding that the positive impacts will become evident in the coming months.
The finance minister also stressed the importance of a charter of economy for sustainable progress. Addressing the rise in chicken prices, he called for stricter administrative measures to curb profiteering by middlemen, who continue to resist price reductions despite declining international commodity and transportation costs.
Challenges Facing EXIM Bank
During the meeting, Senator Salim Mandviwalla, Chairman of the Senate Standing Committee on Finance, highlighted the challenges facing EXIM Bank. He expressed concerns about the delayed appointment of the bank’s CEO, which has remained vacant for two to three years, and the late formation of the bank’s board, which took place after a two-year gap. “The state of affairs at EXIM Bank is very fragile,” Mandviwalla remarked.
The committee resolved to conduct quarterly reviews of EXIM Bank’s progress. An EXIM Bank representative informed the committee that the bank exceeded its first-year target under the IMF structural benchmark for transitioning the Export Refinance Facility (ERF) from the State Bank of Pakistan (SBP) to EXIM Bank, achieving 168% of the target. The bank is currently managing export finance scheme limits of Rs421 billion and implemented an EFS enhancement scheme of Rs230 billion, with 40% allocated to SMEs and 60% to corporates.
IMF Program and Economic Stability
Senator Aurangzeb reaffirmed Pakistan’s commitment to the IMF’s loan program, emphasizing its role in fostering sustainable and organized economic growth. “Three years ago, rapid economic growth caused immense balance of payments pressures. Now, we will not overaccelerate growth regardless of external pressures,” he stated.
Progress on Other Matters
The committee also addressed other financial issues. Federal Board of Revenue (FBR) officials confirmed that Federal Excise Duty (FED) would not be imposed on electric vehicles (EVs), following an opinion from the Ministry of Law and Justice.
The Accountant General Pakistan Revenues (AGPR) briefed the committee on non-compliance with Senate Secretariat orders regarding pay fixation for newly promoted Private Secretaries and Director Staff. AGPR officials clarified that the cited policy no longer exists and that the matter is pending a court decision.
Pakistan Remittances Initiative (PRI)
The committee reviewed the Pakistan Remittances Initiative (PRI), a program aimed at enhancing national remittances. Mandviwalla noted that the initiative, under which the SBP bears remittance fees on behalf of senders, has significantly increased remittances from $7-8 billion in 2009 to $30 billion, with projections of $35 billion by the fiscal year’s end. The SBP paid approximately Rs86 billion in bank charges last year. The committee requested detailed, year-wise data on remittances and payments made under PRI.
Source: Business Recorders
