A delegation of Pakistan Leather Garments Manufacturers & Exporters Association (PLGMEA) met Governor State Bank of Pakistan, Ashraf Mahmood Wathra, on Tuesday and discussed SBP-related problems faced by exporters. Patron-in-Chief of PLGMEA Fawad Ijaz Khan requested the Governor SBP that "the ultimate finished goods exporters should be charged reduced mark-up rates on ERF Loans at three percent and other exporters of raw materials and semi-finished products should be charged six percent.
In this way SBP will maintain their average markup rate of 4.5 percent which exporters are paying. Banks keep one percent spread for corporate borrowers and two percent for SME borrowers." Fawad suggested that there should be extra incentive for exporters of ultimate finished goods exporters which are main source of employment generation. Several local down-stream industries also flourish with growth in ultimate finished goods industries. The Governor listened to the suggestion of PLGMEA and assured to look into this proposal.
He discussed the issue of banking hurdles in trade with Iran. "Iran is one of our major trading partners. Exporters and importers face problems in export and import transactions with Iran due to international sanctions imposed." Fawad briefed the Governor that at present a lot of leather is imported from Iran into Pakistan but because of sanctions the payments are routed in Dirhams via Dubai. Recent settlement of Iran nuclear matters with international agencies will lead to opening of trade with Iran. Fawad requested the Governor to guide banking sector in this regard.
Ashraf Wathra clarified that sanctions on Iran had not been lifted as yet and it would be after February 2016 that normal trade with Iran could take place. He said SBP was very much update on the issue and would allow normal trade with Iran after lifting of all sanctions.
Fawad asked the Governor SBP to expedite the release of four percent incremental rebate claims of leather garments and leather goods exporters. Ashraf advised PLGMEA to take up the matter of release of Rs 200 million required with the Finance and Commerce Ministry. The State Bank team was represented by the concerned executive directors and directors. Irfan Iqbal, Rashid A Zahur, Rizwan Khan, Rizwan Rashid and Daniyal Shaikh represented PLGMEA in the meeting.-PR