The Lahore Chamber of Commerce and Industry (LCCI) has urged the finance minister and central bank to direct banks to open letters of credit and assist in the prompt release of the shipping containers at the ports to keep the industry operating. Due to the lack of raw materials, several industrial facilities are on the verge of closing, LCCI President Kashif Anwar, Senior Vice President Chaudhry Zafar Mahmood, and Vice President Adnan Khalid Butt said while expressing their concern. They said that in order to prevent further deterioration of the economic crisis, the finance minister and the State Bank of Pakistan must act right away.

They also warned that any further delay could result in a further rise in unemployment in the country. They said that several LCCI members complained about banks abusing the business community's gullibility. They overcharged at the interbank rate in addition to refusing to open letters of credit (LCs). It seems that banks are independent and are not answerable to any authority as no one is taking note of what they are doing, they added.

"Instead of being a silent spectator, the State Bank of Pakistan should take immediate notice of the miseries of the business community and issue directives to all the banks to open letters of credit without any hindrance," they said. Several LCCI members have also voiced complaints over importation issues brought on by the State Bank of Pakistan's most recent Exchange Policy Department (EPD) Circulars No. 09 and No. 11. They said that before beginning transactions for imported products, they request permission in advance from the Foreign Exchange Operations Department.

As a result, they said, the commercial banks take a very long time to release shipping documents, which causes a delay in the processing of cargo at the port. Consequently, importers must pay large demurrage, port fees, and detention fees, which raise the cost of their goods once they reach their destination. The LCCI office-bearers stated that importers should be permitted to submit their case for approval against a copy of the bill of lading to the State Bank through their banks as soon as the bill of lading is issued by the shipping line at the port of loading. It will make it easier to obtain permission and the necessary documentation quickly before the shipment reaches the port, they added.

They said that since the State Bank's guarantee backs the letter of credit, no prior permission is necessary. The commercial banks should deliver the shipping papers without delay if they were received with a deferred payment arrangement. They stated that the business community is the foundation of the economy, and since the government derives more than 90% of its total revenue from this sector, it is important to provide necessary support and an environment that encourages business. They claimed that the economy is already facing significant difficulties and that the banking industry's lack of cooperation with the business community would only fuel the fire. They further claimed that without the proper participation of businesspeople, it would be nearly impossible to get the economy back on track.

Credit : Independent News Pakistan-WealthPk