Raise in interest rate criticised

The Chairman of Faisalabad Dry Port Trust, Ashfaq Ahmed, has strongly flayed the enhancement of bank mark-up by the State Bank of Pakistan on the pretext of curbing inflation, and said that this unwarranted increase would badly hit the crisis-ridden industry and hamper the industrial production.
Talking here with newsmen Monday, he said that the fixation of 35 percent margin on imports L/C would further increase the problems being confronted by the industry whose working capital has already exhausted and the banks have adopted stringent treatment. He added that 35 percent margin would mean that industrialists would get bank loans at the rate of 15 percent and deposit the amount in the banks which would allow 5 percent mark-up and hence the industry would bear a loss of 10 percent on the imports.
Ashfaq said that after unprecedented load-shedding of gas and electricity and exorbitant prices of utility bills, the increase in bank loans mark-up would further deteriorate the situation and it would culminate at unbearable increase in the cost of production, resultantly the exports would become uncompetitive in the global market.
He said that due to sharp decrease in industrial production, the cargo at Faisalabad and other dry ports of the country has registered an alarming decline of 25 percent. He demanded of the government to take appropriate measures by giving some lucrative incentives and substantial decrease in the electricity and Sui gas rates, enabling the industry to keep its wheels running.
Quoting the example of America, the FDPT chairman said that whenever the industry in USA plunge into crisis, the US government applies chapter 11 and stops payment of instalments and mark-up on bank loans so that the industry should revive again but, on the contrary, the trade & industry in Pakistan is not allowed such concession and most of the industrial units become sick.
He demanded of the government to give some concessions and increase the research and development (R&D) so that the industry could cope in the domestic & international markets. He demanded that till the industry is revived, the installments and mark-up on bank loans be stopped otherwise there would be a se4rious repercussion which would lead to the closure of industrial units and render thousands of industrial workers jobless.