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More financial institutions want to buy KASB Bank: SBP Governor

More financial institutions want to buy KASB Bank: SBP Governor

KARACHI: State Bank of Pakistan Governor Ashraf Mehmood Wathra, while talking to traders at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has said that KASB Bank has not been closed and the issue will be resolved in six months as two banks are already engaged in the due diligence process, which may lead to a merger or acquisition.

The SBP governor said that a third bank has also sought permission for evaluation of KASB Bank and two or three more financial institutions are in the process of negotiations in this regard.

Wathra claimed credit for the decline in inflation, saying the price fall was the result of central bank’s monetary policy stance over the last about one and a half years.

However, he reminded the businessmen that interest rate could not be brought down only on the basis of a drop in international crude oil prices and other factors had also to be taken into account. These included investment demand and supply, balance of payments position, trade projections and debt repayments.

“The central bank has cut the key policy rate in the last monetary policy and a further reduction could be considered in next policy reviews,” he said. “The monetary policy decision is taken by the independent board of the central bank on the recommendation of the Monetary Policy Advisory Committee, in which the private sector has its representatives.”

He acknowledged that investments by banks in government’s treasury bills and bonds stood higher than the benchmark of 1% of their assets. Still, banks have adequate funds available for the private sector and they will not deny credit requests of businessmen by saying they have parked money in government papers.

Talking about the incentives given to exporters, Wathra said the central bank had cut the export refinance rate and also offered rebate to the leading performers. For the rebate facility, Rs400 million has been set aside which is separate from the rebate given by the government.

Apart from this, the exporters are also provided long-term financing facility by the government.

The central bank has also reduced the refinance rate for small and medium-sized enterprises, which are provided 2.5% rebate by the government.