KARACHI: State Bank of Pakistan (SBP) Governor Jameel Ahmad on Wednesday announced to form a joint committee in collaboration with the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) for the resolution of the huge backlog of the letters of credit (LCs), a statement quoted Irfan Iqbal Sheikh, president of the FPCCI, as saying.

The committee will comprise four to five nominees of the FPCCI’s president and more or less, the same number of the SBP officials will be nominated by the central bank governor, he added.

Sheikh said that the committee will be co-chaired by Suleman Chawla, senior vice president of the FPCCI, from the apex body; and, advised the entire business, industry and trade community to bring their cases to the aforementioned committee. A collective voice should be raised in the broader national interest, he added.

The apex trade body chief explained that delays are causing a plethora of debilitating issues: detention charges, demurrages, shortages of raw materials for industrial production, closure of major industrial units, disruptions in the supplies of agricultural inputs, closure of plants due to the unavailability of spare parts of the machinery and equipment, non-fulfillment of export orders, loss of revenue due to the dwindling production and massive layoffs.

Sheikh stressed that pending cases falling under three different categories can be resolved immediately: (i) all import consignments not involving dollar outflows should be cleared with immediate effect (ii) the SBP should come up with a crystal clear plan on what the importers can order from the international suppliers to enable the business community keep the trust of suppliers (iii) open account should be completely restored, as currently, it is only good for industries for their raw materials.

Mian Anjum Nisar, former president of the FPCCI, highlighted that there are three different markets for dollars operating in the country; with the rupee to dollar rates of their own; namely, interbank, open market and grey market.

The SBP should take regulatory action against the commercial banks for speculative trading and causing unbearable losses to the businessmen, he added.

Expressing dismay, Mian Nasser Hyatt Maggo, immediate past-president of the FPCCI, said that the SBP is behaving like as if they are the World Bank or the International Monetary Fund (IMF); and, not listening to the genuine concerns of the business community.

He warned that the situation is so precarious that there may be social unrest due to the fast-amassing economic disarray.

The SBP governor said: “We will discuss individual or sectorial cases in the joint committee with the FPCCI. However, he announced some broad measures to alleviate the concerns of the business community: (i) the SBP will be striving to clear the backlog of approximately 11,000 cases (ii) food products; industrial raw materials; energy producing imports and agricultural raw materials will be given priority when opening LCs (iii) the SBP will share its findings pertaining to the mismanagement of the foreign exchange; and, appropriate action will be taken against commercial banks – if required (iv) he will personally interact with the FPCCI committee to reach the resolutions fast.

Jameel Ahmed also informed that the SBP cleared 33,000 cases in 2022; and, it took a lot of time, efforts and other resources of the SBP. We are expecting an enhanced inflow of dollars in the coming weeks; and, the situation will improve, as well, vis-à-vis the dearth of dollars for imports.

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