Cabinet approves first SME policy: SBP allowed to take action against moneychangers

The federal cabinet on Wednesday approved the first Small and Medium Enterprises (SME) policy, delegated powers to State Bank of Pakistan (SBP) to impose financial penalty on money exchange companies for violating foreign currency rules and allowed Khushhali Bank to pay dividend to the shareholders.
The cabinet also accorded approval to reintroduce Rs 5 currency notes, draft prevention of electronic crime bill and enhancement of jobs quota in civil service to 6 percent from 3.5 percent for Balochistan.
A press release distributed among the journalists says that the cabinet considered and approved in principle amendments in the Foreign Exchange Regulation Act 1947 proposed by the Finance Division.
After legislation, the amendments would empower SBP to take immediate action to deal with any person, exchange firm, corporation or company that contravenes any provisions of the foreign exchange regulation Act. The cabinet approved removal of restrictions under Section 35(1) of Khushhali Bank Ordinance 2000 to allow the Bank to pay dividend to its members.
The cabinet took cognisance of the problems faced by the people after discontinuation of Rs 5 currency note and decided to reintroduce it. The Prime Minister directed the SBP to come up with new design of Rs 5 note for consideration by the cabinet and also carry out analysis of designs of different currency notes for improvement and discount chances of counterfeit currency.
The cabinet also approved new composition-weight-size parameters of coins of the denomination of Re 1, Rs 2 and Rs 5. The cabinet considered report of the cabinet committee for reviewing Zakat and Baitul Mal system in the country and directed the Ministry of Religious Affairs and the cabinet committee to further review the conceptual aspects of the systems.
The cabinet considered the prevalent provincial/regional quota in the Federal Services and decided to enhance the quota for Balochistan from 3.5 percent to 6 percent. The cabinet also decided to carry out further discussions in its next meetings regarding the quota of other regions/provinces.
The cabinet considered and approved in principle the SME policy and the Prime Minister emphasised the need to activate and strengthen the SMEs in the country, as these enterprises were the largest employment generation tools in the country.
He also directed to improve the logistics, remove red tape, do away with the culture of subsidies and improve efficiency of the SMEs at the district, provincial and federal levels.
The cabinet directed the Ministry of Industries and Production to seek approval of the fiscal and tax measures proposed in the SME policy through the normal procedures. The cabinet also approved to start negotiations with UK on draft agreement on counter terrorism and organised crime on reciprocal basis.
The Prime Minister directed the Ministry of Interior to ensure that the principle of reciprocity in co-operation by Pakistan with other states on exchange of information and related matters to counter terrorism is observed. He said, "Pakistan cannot be expected to be compliant on requests of security co-operation from other states unless reciprocal response is received by Pakistan from other states too".
The cabinet ratified the draft agreement between Pakistan and UAE on co-operation and mutual assistance in customs matters. The Cabinet also approved ratification of the charter of Asian Disaster Preparedness Centre. This provides for assistance to the Asian and Pacific countries in developing their policies and capacities to mitigate the impact of disasters as well as promotion of disaster awareness, collaboration and exchange of experiences lessons learnt in disasters.
The Prime Minister informed the cabinet that this was a good initiative as Pakistan had experienced devastating earthquake last year. He also expressed satisfaction over the rehabilitation and construction work carried out by the government in the earthquake areas of Azad Kashmir and NWFP.
He asked the cabinet members to visit the areas after intense cold weather is over and see for themselves the tremendous progress achieved in reconstruction of the earthquake affected areas and brief the people about the progress.
The cabinet approved the amendment in the Constitution and Rules of Procedures of the General Assembly and Management Committee of the Asia Pacific Tele-community, as it has no adverse implications for Pakistan.
The Cabinet considered and approved in principle the proposed Prevention of Electronic Crime Bill 2006 moved by the Ministry of Information Technology. However, the cabinet decided to set up a committee under the chairmanship of Sharifuddin Pirzada to look into the implementation mechanism and other legal aspects contained in the proposed bill.
The committee would submit its recommendations to the Cabinet with 30 days. The Prime Minister observed that Pakistan was fast developing its IT infrastructure and there was an urgent need to put in place appropriate legislation to combat cyber crime.
Prime Minister directed that all stakeholders particularly the private sector should be involved in finalising the implementation and enforcement mechanism proposed in the draft bill.