ISLAMABAD: The government is planning to initiate commercial operation of the Export-Import (EXIM) Bank of Pakistan within the first quarter of the calendar year 2022, WealthPK reported.
The government aims to operationalise the bank to promote, expand and diversify the country’s international trade by providing credit, guarantee and insurance products to exporters and importers.
EXIM Bank of Pakistan has been declared a development finance institution under the Banking Companies Ordinance. The bank has been designated as the official export credit agency of the country to be formed through an Act of the Parliament.
According to a brief of the Ministry of Finance, a copy of which is available with WealthPK, EXIM Bank of Pakistan has been set up for supporting services to exporters and importers in the form of a statutory corporation that has the backing and support of the government as is customary for export credit agencies to achieve their desired potential and objectives.
The bank was declared a development finance institution on June 9, 2015 and incorporated with the Securities and Exchange Commission of Pakistan (SECP) under the Companies Ordinance 1984 as a company limited by shares.
The government has released Rs7 billion out of total paid-up capital of Rs10 billion. The authorised capital is Rs100 billion, divided into Rs10 billion ordinary shares of Rs10 each and the government holds 100 percent of the bank’s shares .
The proposed bill focuses on the purpose of the bank related to the development of trade, export support and import substitution support to the economy and in doing so, it provides for and explains the powers of the bank to offer trade services, obtain reinsurance, open and operate bank accounts and take securities to secure itself, incorporate subsidiaries and related powers which will support the key purpose of the bank.
In 2018, at the request of the Government of Pakistan, the Asian Development Bank (ADB) approved a technical assistance grant of $500,000 to support operationalisation of the EXIM Bank of Pakistan and appointed Internal Financial Consulting Limited (IFCL), Canada to provide deliverables under the subject technical assistance. One of the very important components of the technical assistance was to draft the EXIM Bank of Pakistan Bill giving necessary powers to the bank to be able to deliver on its mandate by providing necessary financing and insurance products to the exporters of the country and promoting foreign direct investment (FDI).
The Ministry of Law and Justice vetted the EXIM Bank draft bill 2021 on May 27, 2021, and later, the Cabinet Committee for Disposal of Legislative Cases (CCLC) granted its approval for the enactment of the bill, and then the decision was ratified by the federal cabinet on July 13, 2021.
Analysts believe that it is a very welcome development that the government is now moving forward to complete legal requirements to operationalise the EXIM Bank. It was long overdue to establish and operationalise the EXIM Bank to compete in the international market for increasing the country’s exports.
This step will help the government achieve its objective of promoting expansion and diversification of the export base of the country by providing credit facilities for launching export-oriented and import-substitution ventures. In the era of the 4th industrial revolution, global competition is increasing due to modernisation and innovation with the utilisation of emerging technologies.
All major countries have already operationalised their EXIM banks to enhance exports. These countries are supporting their exporters to increase their competitiveness for international trade with timely provision of financial and other relevant supporting services.
INP
