Pakistan's industries battered by falling exports amid the global economic slowdown, have entered a restructuring phase, which will encourage banks to enhance private sector lending, Former Punjab Minister for Industries Khawaja Muhammad Jalaluddin Roomi said while talking to newsmen here on Sunday. Private sector credit off take has decelerated sharply in recent months.
Between July-April 2008-09, the private sector got credit worth only Rs48 billion compared with Rs 371 billion in the same period of the previous year. This trend along with a substantial increase in government borrowing from commercial banks has fanned concerns that the private sector may not get its share of credit.
He said "banks should start lending once exports picked up". NPLs (non-performing loans) have also risen in the SME sector, the textile industry and the consumer segment. "According to the State Bank of Pakistan (SBP) recent economic review, banks have also not been able to mobilise deposits. Towards this, banks should adopt a customer-centric segmented approach.
"Banks and financial institutions should focus on improving the quality of service by using automation and training of staff to satisfy the customers," Roomi said.