(03 October 2015)
Pakistan Businessmen and Intellectuals Forum (PBIF) on Saturday said some IMF conditions are against the national interests while some steps backed by the lender cannot be dubbed as business friendly.
Getting costly loan from international market to service previous debt is not considered in in the national interest but it can be supported if used to boost forex reserves, said PBIF President and former provincial minister Mian Zahid Hussain.
He said that IMF is aware that Pakistan’s expenditure is more than its income but it has slapped limits on borrowing from the central bank pushing government to commercial banks.
The State Bank provides money to commercial banks which they lend to government on high interest rate which means that government is taking loan from itself and paying interest in billion to banks, he said.
Banks prefer risk-free lending to the government ditching trade, industry and agriculture where the threat of default exists.
Mian Zahid Hussain said that reduction in the interest rate has reduced profit of banks but still many banks have lent over 95 percent of investable funds to the government.
The easy money has pushed banks into a comfort zone caring less about widening customer base, innovate, introduce new products, give proper profit to accountholders or improve reputation.
He said that government should introduce tax reforms so that it should stop asking for aid and loans.
Despite incompetent export managers the forex reserves have surpassed mark of 20 billion dollars which is an achievement, however, Bangladesh’s reserves are at 30 billion dollars due to exports only.
