The Economic Co-ordination Committee (ECC) of the Cabinet, which is scheduled to meet on Thursday under chairmanship of Finance Minister Abdul Hafeez Sheikh, will consider the proposal of the Ministry of Industries and Production (MoI&P) to reduce the prices of locally manufactured cars.
Official sources told Business Recorder that the MoIP had requested the Cabinet Division to bring this item on the agenda. The summary was submitted in September 2010.
The proposal to withdraw 5 percent withholding tax on electricity bills in Karachi Export Processing Zone and withdrawal of 5 percent regulatory duty on sack paper is also on the agenda of the ECC meeting. The ECC will consider rescue package, of Rs 3 billion, for Bank of Khyber (BoK), which, according to the State Bank of Pakistan (SBP) Governor was badly managed and governed for five years.
"Provincial government has requested the federal government to immediately extend Rs 3 billion to BoK to meet the requirements set by the SBP," sources said. In November, 2008, the government had introduced credit guarantee scheme for one year with an aggregate amount of Rs 75 billion for small banks enabling them to meet their liquidity requirements.
The scheme is meant to support small banks with total assets not exceeding Rs 50 billion and is administrated by the State Bank of Pakistan (SBP). The scheme was further extended for a further two years--up to November 12, 2011--with the approval of the Prime Minister.
At the behest of SBP, bridge financing facility of Rs 10 billion was extended to the Bank of Punjab with the approval of ECC in May 2009 to comply with the SBP's regulatory capital adequacy requirements on the following terms and conditions: (i) the period of loan will be five years including minimum of one year grace period and it shall be exclusively used for recapitalization of BoP; and (ii) mark-up rate of return shall be three months weighted average T Bills rate and will be paid by the Government of Punjab on quarterly basis. The principal amount will be paid in sixteen equal quarterly instalments due on July 1, 2011.
According to sources, presentation on FDI trends and steps to enhance FDI and home remittances and establishment of EPZA Tech Tower will be considered by the ECC. It is unclear whether Ministers belonging to MQM will attend the ECC meeting, as they had boycotted Cabinet meeting held in Lahore last week. Two MQM Ministers, Dr Farooq Sattar and Babar Ghauri, are members of the ECC.