SBP policies destabilising economy: Bankers

PESHAWAR Some policies of the State Bank of Pakistan (SBP) are seen as a dest-abilising agent in the financial circles, a top banker told TheN-ation on Tuesday. The regulator sometimes supports political agenda that may contribute towards uncertainty, dull growth and poverty. Ignoring prudential regulations may impede healthy trends and put a question mark on the voraciousness of the banking sector, they said. The primary responsibility of central bank is to protect the interests and act as fiscal agent of the Government, otherwise masses and system may become vulnerable, a top executive in a provincial bank said on condition of anonymity. Known research scholar and economist Senator Prof. Khurshid Ahmed said, We should not adopt foreign economic policies and abstain from hiring costly non-citizen consultants. We cant succeed without homegrown plans. Expressing deep concern over uncertainty and deteriorating economy, he said, The apex banks role was transformed in early 90s when Government decided to appoint former officials of international lending institutions as governors of SBP. Government seems indifferent to the situation, the Senator added. The former employees of Citibank have been orchestrating policies and making budgets since eleven years which has changed the direction of economy and increased poverty, said Dr. Murtaza Mughal, head of an independent watchdog. Masses will only trust institutions that are not seen as a political tool to victimise some and benefit blue-eyed, he added. We can have prime ministers from Citibank and World Bank why cant we have a governors of central bank from the same institutions, was the candid response of Akram Zaki, former minister for state for foreign affairs. All those with loyalties outside Pakistan or dual nationality should be disqualified for holding any office in the national interest, he demanded. Earlier manufacturers, exporters, and importers use to seek loans but now whole nation has been subjected by pushing up the artificial demand. Concept of consumer finance was basically flawed; it supported banks, and services sector while deprived masses largely, another seasoned banker told TheNation. A central bank should never overlook responsibility of preserving the integrity of banking and monetary system, he said. Haji Afzal, Chief of Anjuman-e-Tajiran NWFP, said that during the last decade, commercial banks were allowed to milk masses, which changed the whole financial pattern in the country. The subsequent developments made Pakistan a goldmine for local as well as foreign banks. Crooked bankers were allowed to operate freely; the situation since then has not improved but deteriorated, remarked Haji Haleem Jan, president Traders Action Committee NWFP. As an accepted global principle, banks get three percent interest on lending, in which they have to cover their profits, expanses and administrative costs. However, in Pakistan banks get 20 to 45 percent interest, which only results in defaults on repayments, closure of businesses and lost employment opportunities, said Shahid Alam, former VP of Muslim Commercial Bank. How can economy improve in a country where the banks record up to 400 percent growth per annum and later congratulate themselves on achievements in newspapers? a veteran banker of BCCI questioned. Bankers bank is now frequently been alleged to be acting as fiscal agent of the financial institutions. Record borrowings by current government have left private sectors with little choice that is shrinking economy and stretching public unrest. I was ashamed of being a Pakistani when our forces surrendered and for the second time when Moeen Qureshi, a World Bank official, was entrusted as our prime minister, Zaki said. Renowned economist Dr Kaiser Bengali said that he was not following the policies of SBP, while Dr Hafeez A Pasha, the head of high-profile panel of economists, said that he was not in picture. Some other economists were also called but they were found unwilling to talk on the issue. Chief spokesperson of the SBP Syed Wasimuddin was called and contacted through email but he did not reply.

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