Written-off loans

Written-off loans

Friday September 14, 2012

www.statesman.com.pk

In 2009 a complete list of bank defaulters was floated in the press and electronic media. The same kind of report was also submitted to the Supreme Court.

It was expected that the apex court will take up the matter earnestly and bring to book the businessmen, political leaders, retired army men, and journalists who were among over 3,300 people who got Rs153.5 billion loans written off from 11 financial institutions between 1999 and 2007.

However, it is disappointing to note that this matter of great national interest has been left in abeyance for some unknown reasons and the defaulters, as well as their counterpart bankers, have been rent scot-free without any accountability.

Since the Supreme Court has just ordered NAB in the containers’ case to either recover the case amount from the accused or in the event of failure to do that bear the markup on its own.

It would be fully justified if the Supreme Court also passed a similar order against the above bank loan defaulters and their accessory financial institutions and ordered NAB or the financial institutions concerned to bear the mark-up on the bungled-up huge amount of Rs152.5 billion if they failed to recover the same in grace time awarded by the court.

Unless quick adjudication is held, it is feared that the nation will lose this precious parcel of national exchequer and that might reflect on the role of the Supreme Court in handling cases according to norms of the law, justice and equity.

Mazhar Butt, Karachi

Export Refinance

Export refinance rates

Friday September 14, 2012

www.statesman.com.pk

Recently the SBP has reduced the discount rate by 1.5 percent, thereby reducing it to 10.5 percent. Since the discount rate is linked to export refinance, exporters have urged the authorities to reconsider lowering it as well.

The reduction in export refinance to exporters will tend to assist exporters to boost their exports but the question is, is all the export refinance already advanced to them fully employed by the exporters for the purpose it is advanced for?

Looking at the overall performance of the industrial exporting sector, it is doubtful that export refinances are genuinely employed for the right purpose. Although this tendency may be found in many exporting industries, the most badly hit exporting sector due to this irregularity is the seafood exporting industry. A few years ago, the largest seafood exporter in Pakistan got busted due to vagaries of utilising bank loans of more than Rs two billion out of which Rs 95 million is still unpaid or said to be written off by its financing institution without the SBP’s approval.

Even after this, conditions in the fisheries sector have not improved and exporters do not readily pay poor fishermen for their hauls. This shows the poor cash flow of those exporters who have already used the huge amounts of export refinances from the financial institutions but are unable to pay promptly.

It also goes to show that the low-interest money that was advanced to them for buying raw seafood has been siphoned away in other pursuits, thereby creating a cash crunch for such exporters. Had all export refinances been invested for the intent they were advanced, seafood exporters should be able to pay for their purchases of raw material (fish/shrimp) to the hardworking fishermen on the spot. But this is not being done. This fact alone reflects on the mystery of mis-utilisation of export refinances by exporters. Frozen seafood is an expensive item and soon builds up in value to meet the 1:1 ratio of borrowing vs exports (previously the SBP ratio was 1:2.4 or one part borrowing vs 2.4 times export).

The banks usually count eligibility for export refinance on the basis of this value and sooner or later are risked to lose their money if the same has not been spent for the right purpose of its granting, viz, purchase of fresh seafood for processing and exports. Although financial institutions are bound to verify the stocks hypothecated against export refinances/loans advanced, this is seldom done, or done in a superficial, casual manner.

Thus financial institutions never come to evaluate the real value of stocks held by the exporter to cover the loan. Then there comes a time when the exporter faces market upsets or quality claims; his exports dwindle to meet the set export target and he goes bust. Although this aggravation may continue for some years unnoticed by the loan-giving agencies; finally, there goes a blast and the matter ends up in the hands of banking courts. This is a very serious matter that needs foremost and immediate attention of the SBP and other concerned authorities if they are looking for a better outcome of the export refinance facility to exporters not only in the seafood exporting sector but in the overall exporting industries of Pakistan.

If the utilisation of export refinancing facility is fully employed in any exporting sector, be it fisheries, textiles and manufacture of other items, there is no reason that these industries will not flourish, without raising an unfair hue and cry over mildly inflated export refinance rates.

Mazhar Butt, Karachi

Little Angels On Earth

For a Night-birdie like me
nothing is better than falling asleep early
get up early and see my little children
dressed up in clean school uniforms
looking tidier and more innocent than any angel unseen
and to drop them to their schools
where I can see more children in godly uniforms
holding school bags and backpacks loaded with books
eager to join their classes
meet their friends
study and play
Wow! My eyes have never seen a better scene
angelic birds of a feather
flocking to their alma maters on earth;
they remind me of my olden days
when I too was one of them
but,Ah! my angelic days have long past
nothing pleases me more than little children
readying for schools
I can see the faces of unseen angels
in their forms!

Do you think I will die?

Do you think I will die
when the fangs of Death bite me??
Oh, no. I am like a flowing river
Death will only unite me
with the Greater Sea!

Are you God ??

God is Not ME
neither I am God–
impossible trans-positioning! !
HE was when Nothing was
He will be when Nothing shall be!!
I am and will not be
HE will be as HE is
Nothing will ever change!

God is not like a table or chair

I was not conscious before I entered this world
I shall not be conscious after I am gone
God is the secret of ALL secrets
You can but reveal only a few!
God is not like a table or chair
that you can count its legs.
It’s not even like a tree or the forest itself.
It is not wood or any other element.
It is the Supreme One that gives you insight and intellect
to think about Him
and the more you think about him,
believe HIM or reject Him the more is he amused!!
He’s the cause He’s the effect…
we are just groping in the dark!!

The Unchangeable Realm of Time and Space

A fire ball up in the sky
when seen from the Earth looks
like a bright star;
A wild fire on Earth
when seen from up the sky
looks like brilliant fire work;
All things on Earth,
All things in Heavens
Exist as they are
Only we see them differently
It’s the aspects that matter;
Time and Space remain the same
New York is New York
Paris Paris
An eye sees them both
and all
From above in the Heavens
At the same time
In the same space;
All things in this Universe
Are like pawns on the chess board
With you watching from above;
They are and will be the same
in the eyes of the unchangeable
realm of Time and Space.