ECC okays credit guarantee scheme for small banks

ISLAMABAD: The Economic Co-ordination Committee (ECC) of the cabinet on Tuesday approved a credit guarantee scheme for small banks to help them maintain liquidity through availability of credit facilities from the State Bank of Pakistan (SBP).

The scheme will be implemented by the SBP, which will ensure its effective utilisation with the objective to ensure sound operation of the banking system.

The decisions were made in a meeting of the ECC, which met under the chairmanship of Prime Minister’s Adviser on Finance and Economic Affairs Shaukat Tareen at the Prime Minister’s Secretariat.

The ECC also approved a market intervention price of Rs 1,465 per 40 kilogramme for cottonseed during 2008-09 season based on the current export parity price.

The committee directed the Ministry of Food Agriculture and Livestock (MINFAL) and the Ministry of Commerce to work jointly to make the procurement plan efficient, so that small farmers benefit from the price.

It also directed MINFAL to ensure that farmers’ facilitation was given top priority and the intervention price is announced at the right time to motivate the farmers.

With a view to lessening the difficulties faced by the automobile sector, the ECC allowed exemption from 35 percent cash margin on the Letter of Credit (LC), while it directed the Ministry of Industries to form a committee comprising representatives from the Federal Board of Revenue, the Finance Division and other stakeholders to firm up proposals that could further ease the problems of the automobile sector.

Gwadar: With a view to speeding up the operations of the Gwadar Port, the ECC directed that all import consignments of wheat and fertilisers will be made through it, whereas cement could also be exported through the port.

The committee also allowed procurement of 750,000 tonnes of additional wheat with better specifications, directing MINFAL to take into account any possible inflow of United States wheat in a manner that domestic requirements are met satisfactorily and wheat stock remains adequate.

Gas: The ECC considered the Ministry of Petroleum and Natural Resources’ Natural Gas Load Management Plan (NGLMP) for Winter 2008-09 and directed the ministry to ensure provision of gas to domestic consumers.

However, the burden of reduced supply will be equitably shared between the power and industry sectors, it decided.

On the recommendation of the Ministry of Water and Power, the ECC extended/made applicable the tariff provisions of the Power Policy 2002, and the mechanism developed by the National Electric Power Regulatory Authority for hydropower projects under the Hydel Policy 1995 for the development of pioneering projects in the private sector.

The ECC also constituted a secretaries’ committee to closely monitor those commodity prices that depend on international prices, and take measures to ensure that reduced prices in international markets are transferred to the consumers in Pakistan.

Fares: The ECC also directed the Ministry of Interior to take measures to ensure that airfares are reduced immediately.

The committee was informed that the country’s foreign exchange reserves stood at $9.1 billion on November 30, after the receipt of the International Monetary Fund’s first instalment of $3.1 billion.

Sorce: The Nation