President Federal B. Area Association of Trade & Industry (FBAATI), Abdullah Abid has urged State Bank of Pakistan (SBP) to develop some policy/procedures for Islamic banking at subsidised rates of 4 to 5 percent.

Appreciating the steps taken by SBP in providing relief to industries for payment of salaries & wages to their workers and employees, he said that many businessmen have approached the association, who are only availing Islamic finance facilities, they belong to SME sector.

He said that SMEs account for more than 90 percent of the total business establishments in Pakistan, they create new jobs and facilitate wealth creation, provide essential business infrastructure for large enterprises, and are the basic source of innovation & entrepreneurial activity.

He said many businessmen from SME sector especially those who are categorised as "indirect exporters" have approached the association and ask to raise our voice on the following:

Exporters have a facility of subsidised credit schemes such as ERF, and SBP have further supported them by providing relaxation in matching amount and reducing the export performance, whereas indirect exporters (SME/MEs) have no subsidised credit schemes.

EFS & LTFF are also available for exporters but no such product of working capital is available for Islamic bank at a subsidised rate of 4 to 5 percent.

Islamic banking is offering products, but all are at KIBOR + spread from 2 to 3.5 percent. Due to the Covid-19 pandemic Pakistan's exporters & indirect exporters are facing difficulties. Instead of providing same growth to economy by facilitating these exporters, they are usually ignored.

In current situation imported consignments of SMEs are in transit for which they need relives through additional banking credit facilities as payment circulation is totally freeze and receivables are mostly delayed they are failed to even pay duties and taxes on imported goods, in this situation enhancement of limits to be allowed for retirement of transit consignments.

It is also relevant to mention that, many factories in Karachi Export Processing Zone (KEPZ) wish to avail products from Islamic bank, but unfortunately there is no window for Islamic banks in KEPZ.

He thanked SBP on behalf of the association for the steps it took in providing relief to the industries. It is pertinent to mention that recent refinance scheme for payment of wages & salaries to the workers & an employee of business concern was once again a great initiative by SBP.