SLIC approved for inclusion in active privatization programme
ISLAMABAD: Minister for Parliamentary Affairs Azam Khan Swati Tuesday informed the Senate that Cabinet Committee on Privatization (CCoP) approved the State Life Insurance Corporation (SLIC) for inclusion in active privatization programme through Initial Public Offer (IPO) by divesting up to 20 percent shares on September 18 last year.
Responding to a question during the Question Hour, the minister said the Ministry of Commerce was requested to complete the pre-requisite formalities of corporatization of SLIC for implementation of CCoP decision.
He said the ministry in its letter on December 19, 2019 informed that the presidential order dated April 6, 2016 was converted into bill by the National Assembly.
Azam Swati said the Senate proposed few amendments which were forwarded to National Assembly Standing Committee but these were still pending.
The minister said the Ministry of Commerce has also indicated some legal hurdles in the corporatization of SLIC and matter was being taken up with the concerned quarters.
He said as regards safeguarding the interests of employees, all necessary steps would be ensured as per law and prevalent policy.
Replying to another question related to Ministry of Finance, Revenue and Economic Affairs, he said the Monetary Policy Committee (MPC) has raised the policy rate by 100 bps to 13.25 percent in its meeting held in July last year.
He said the major considerations of the MPC behind increasing policy rate by 100 bps unclouded upside inflationary pressures emanating from exchange rate depreciation, adjustments in utility prices and budgetary measures mentioned in financial year 2020 budget.
The minister said the MPC clarified that any unanticipated increase in inflation that adversely affect the inflation outlook may lead to further modest tightening where as a reader than expected softening in domestic demand and downward revision in projected inflation would provide funds for easing monetary conditions going forward.
Azam Swati said as for the highest level of policy rate was concerned, it has been considerably higher than current level on various occasions since calendar year 2000.
He said that specifically, policy rate was at 14 percent during June to July 2001, 15 percent during November 2008 to April 2009, 14 percent during April to August 2009, 13.5 percent during September to November 2010, 14 percent during November 2010 to July 2011 and 13.5 percent during August to October 2011.
Azam Swati said the MPC have kept the policy rate unchanged at 13.25 percent in the next three meetings after July 2019, held on September, November and January 2019-2020 owing to somewhat improving economic indicators, stability and confidence in the economy.
He said that going forward, the MPC’s decisions would continue to take into account inflation outlook and developments taking place in other sectors of the economy.
The minister said the current macroeconomic reforms were expected to reduce inflation, create employment opportunities and restore investor confidence in the medium to long-run.
He said the State Bank of Pakistan (SBP) has been putting efforts to make legal and regulatory infrastructure in compliance with Shariah principles.
Azam Swati said that major initiatives taken for growth of Islamic banking in the country included in order to Islamize the financial system, significant efforts were made during 1980s and pioneering work was done on legal, regulatory and supervisory fronts, efforts made by Pakistan for transformation of banking system were appreciated at the international level as a number of countries leveraged the work undertaken by Pakistan.
He said a gradual approach for transformation of banking system into Shariah compliant banking was adopted at the start, of this millennium wherein both the Islamic and conventional banks were allowed to operate simultaneously in the country.
The minister said this approach has proved to be a success since its re-launch in 2002. The industry now accounts for 13.8 percent of the country’s overall banking system in terms of assets while in terms of deposits the share is 16.1 percent (as of September 30, 2019).
Azam Swati said currently, 22 Islamic Banking Institutions (5 full-fledged Islamic banks and 17 conventional banks having Islamic banking branches) were providing an array of Shariah compliant products and services through their network of 2,979 branches along with 1,353 windows (Islamic banking counters at conventional branches) across the country.
He said it was true that the prices of cars being assembled in the country were on the rise mainly due to rupee devaluation, imposition of additional levies like federal excise duty, additional customs duty, improvements in vehicles and introduction of additional features.
The minister said moreover, dollar price increase also hurts their vending industry as raw materials (plastic, rubber, steel sheets) for parts manufactured locally was also imported and is subject to increase due to increase in dollar price. – APP