LAhore ISmAIl dIlAwAR S TATE Bank of Pakistan (SBP) Governor Yaseen Anwar on Tuesday said the country's economy has the ability to navigate through deep waters. "I’m excited by the economic potential that this country holds, and I encourage you all to become a part of the country’s future by becoming a part of the solution," he said while delivering a speech at Pakistan Navy War College, Lahore. He said while our current economic sit- uation is less than optimal, it is also far from what may be described as an eco- nomic calamity. Anwar said in 65 years, Pakistan had never gone through an episode of hyperinflation and never defaulted on its international and domestic debts. In fact, our economy has grown consistently, but not spectacularly, over the past six decades, he said. “This has been despite periods of international alienation and sanctions, three expensive wars, two hostile fronts, regular political upheaval, social unrest, sharp in- creases in the price of oil, and much, much more,” he added. Anwar said the SBP has always en- sured that the financial system of the coun- try remains safe and stable. The robustness of our financial system is a direct conse- quence of the reforms process and the cen- tral bank’s constant vigilance, he said, adding that there’s a lot that can be im- proved in our financial system. He called for the development of efficient debt mar- kets, even better regulatory and reporting practices, and the broadening of the finan- cial sector’s scope to include largely un- banked sectors of the economy, such as agriculture, small and medium enterprises, and housing. “Despite this wish-list, the fact remains that our financial system is, by design, secure and does not pose any threat to the economy as a whole,” he said. The SBP governor pointed out that the size of Pakistan’s undocumented economy is, by some estimates, as large as the formal economy. The informal economy does not file taxes and, while it does absorb a signif- icant chunk of the labour force, it also evades corporate and labour laws, he said, adding that although close informal rela- tionships do make the economy more re- silient, they do so at a cost to the overall economy, by eroding the ambit of regula- tors. “Ideally, we, at the SBP, would like to see a smaller informal economy, while so- ciety retains the structure that has made it so resilient,” he stated. He stressed the need for greater integra- tion of Pakistan’s domestic market with the global markets but added this did not mean that we should not have proper controls and mechanisms in place to safeguard our own interests. “Greater integration with finan- cial markets will mean that capital will flow more quickly through our borders. It is def- initely something that will boost the na- tional economy, but, as most East Asian countries learned in the 90s, it can be a dou- ble-edged sword. Therefore, having some capital controls in place, which reduce the volatility of capital flows, is a necessary regulation in this day and age,” Anwar added. More effective regulation is the need of the hour for our own economy, he said, adding that it is an essential part of what is needed today to get the economy on track for steady and sustainable growth. He said the government’s footprint in some sectors of the economy is very large, while it remains quite negligible in other sectors. “Such divergence is unhealthy. Ef- fective regulation is sorely lacking in other sectors. The tax machinery can be tightened considerably. One of the country’s most challenging problems today is the size of the fiscal deficit–and a large part of the so- lution lies in increasing our tax base by en- acting regulation that encourages tax compliance, and punishes tax evasion,” Anwar said. Anwar said the government will need to borrow less money from the central bank. Borrowing from the central bank is popularly known as printing money, he said, adding that if government borrowing from the central bank falls, inflation will follow suit. “Therefore, better tax collec- tion is a necessary condition for faster eco- nomic growth. And for that we need to have more effec- tive tax regulation,” he added. He said aver- age inflation for the cur- rent fiscal year will likely re- main in the 8.50-9.50 percent range. “Interest rates are reviewed, and may be revised, every two months, which allows our policy re- sponses to be nimble to any changes in the economic envi- ronment. The Bank also ensures that the money mar- ket is never short of funds, which means that monetary policy signals are transmitted efficiently,” the SBP governor said. 01 BUSINESS B Wednesday, 6 March, 2013 Industry in Pakistan is in dire straits and the PTI industrial policy aims to build solid foundations for its revival by creating 10 million new jobs for the youth over the next five years – PTI leader Asad Umar ‘Economy able to navigate through deep waters’ Habib Metropolitan Bank closes the year on a profitable note LAHORE: Habib Metropolitan Bank closed the finan- cial year 2012 by recording a profit-before tax of over Rs 5 billion; in doing so, the 7th largest bank of Pak- istan in terms of shareholder equity, exhibited an in- crease against the profit-before-tax of Rs. 4.6 billion posted at the end of the previous year. This amplification of profitability was supplemented with a growth of 4.4 percent in the bank’s total assets, which stood at Rs 301 billion on December 31, 2012, and a noteworthy increase of 17.50 percent in the bank’s deposit base. Meanwhile, CASA deposits demonstrated a significant growth of 20.60 percent against the previous year, as the CASA mix of the bank amounted to an increased 53.80 percent. Net markup income of HabibMetro Bank increased by 7.90 percent and stood at Rs 8.30 billion, while non- markup income registered an increase of 5.20 percent, standing at Rs 5.40 billion at the end of the financial year 2012–an enhancement that is primarily attributed to the 18 percent growth in fee-based income and 12.18 percent growth in trading and dividend income. The bank’s Board of Directors recommended a final cash dividend of Rs 2 per share or 20 percent for the year ended December 31, 2012, against the 15 percent cash dividend announced in the previous year. Commenting on the bank’s financial performance in the year 2012, President and CEO, Sirajuddin Aziz said, “HabibMetro performed well despite the chal- lenging economic environment of the country. Going forward, the bank will endeavor to further develop its product suite by adding attractive features to its prod- uct offerings during 2013. Through this commitment to improvement, we aim to better our customers’ bank- ing experience with HabibMetro.” Other initiatives and occasions of note with respect to the bank include the launch of a reinvigorated brand identity earlier in the year, with the user-friendly nomenclature ‘HabibMetro’ accentuating the Group’s heritage. This was followed by the completion and cel- ebration of 20 years of service by the bank, on Octo- ber 21, 2012. 20 new branches spanning 7cities were added to the branch network during the year, enhancing the bank’s branch outreach to 183 branches across 28 cities Pak- istan-wide. Of these, 11 new branches were opened in Karachi, taking the bank’s presence in the metropolis beyond the 100-branch milestone. Trade business amounting to Rs 791 billion was handled, as PACRA awarded the premier AA+ and A1+ credit ratings to the bank for the 12th consecutive year. HabibMetro’s footprint is expected to penetrate new cities and its branch network is scheduled for expan- sion with the opening of 25 to 30 new branches during the year 2013. STAFF REPORT APCNGA rejects move to close 15-year-old CNG stations ISLAMABAD: The All Pakistan CNG Asso- ciation (APC- NGA) on Tuesday rejected the move by the Petro- leum Ministry to close CNG filling stations that had completed fifteen years of op- erations, terming the decision detrimental for the masses. Some officials in the ministry are bent upon damaging the CNG sector that pro- vides economical fuel to the masses and saves precious foreign exchange, said the association. The government wants to benefit the powerful petroleum and liquid gas sectors, it said. The summary moved by the ministry to the cabinet’s Economic Coordination Committee (ECC) to close down CNG outlets is a plot to deprive masses of eco- nomical fuel, damage the transport sector, plunge millions into unemployment and lay to waste our investments, said APC- NGA Chairman Ghiyas Abdullah Paracha. In a statement issued on Tuesday, he said Advisor to PM on Petroleum Dr Asim Hussain has been desperately trying to close down the CNG business and intro- duce LPG in the market as soon as possi- ble. Showing no respect for prevalent laws and rules, the minister has been overstepping the authority of Oil and Gas Regulatory Authority (OGRA) since years and has been taking controversial decisions, that have remained unpopular, even with the ruling elite, he added. Dubbing the summary a plot to destroy in- vestments in the CNG sector, Paracha said any hasty decision in the forthcoming meeting of the ECC would be resisted with full force. Paracha said an urgent meeting of the APCNGA Central Execu- tive Committee has been summoned to discuss the situation and devise a counter strategy. NNI ISLAMABAD KASHIF ABBASI The composition of Zarai Taraqiati Bank Limited (ZTBL) Board of Directors (BoD), which had al- legedly written off loans to the tune of millions of ru- pees to some influential industrialists, has been challenged in the Islamabad High Court (IHC). Challenging eligibility of all nine members in the board, the petitioner, who is also an employee of ZTBL, requested the court to stop the board from working any more. A divisional bench of IHC comprising Chief Jus- tice Muhammad Hussain Kasi and Justice Shoukat Aziz Siddiqui heard the petition and issued notices to all respondents. Through his counsel, the petitioner apprised the court that former president of ZTBL, Muhammad Zaka Ashraf, who is now Pakistan Cricket Baord’s Chairman, still enjoys membership of the ZTBL board. “Zaka Ashraf is not fit according to BRDP cir- cular No 4/2007 issued under the Prudential Regula- tion framed by the State Bank of Pakistan for good governance and regulation of the bank. He is an un- dergraduate and a very active member of the ruling party. However, he is exercising his power for the last four years as a board member and a member of critical decision making committees such as Human Resource Management Committee, Board Audit Committee and Committee on Credit plan,” read the petition. The petitioner pleaded that the directors pro- ceeded to act in violation of law, extending illegal ben- efits to some clients based on political grounds, by application of SBP Circular No.22, of 2002, which was not applicable in the particular case. The petitioner alleged that the board’s decisions had caused a loss to the public exchequer worth Rs 2111.629 million. The plaintiff further told the court that all members enhanced their fee per meeting from Rs 4,000 to Rs 30,000-exclusive of club class air tickets and executive rooms in five-star hotels. After hearing the arguments, the court issued notices to respondents including sec- retary cabinet, secretary establishment, SBP governor, ZTBL, Zaka Ashraf and other board members, ad- journed the hearing for an indefinite period. ZTBL BoD composition challenged in IHC PeTiTioneR allegeS The boaRd WaiVed loanS WoRTh millionS of RUPeeS illegallY ISLAMABAD APP Gold imports during the first seven months of the current fiscal year surged by 31.87 percent against the same pe- riod, last year. According to data revealed by Pakistan Bureau of Statistics (PBS), the precious metal weighing 2,282 kilogrammes worth $123.382 million was im- ported during the period under review compared to im- ports of 1,741 kilogrammes valuing $93.561 million during the same period last year (2011-12). On month on month basis, gold imports in January 2013 registered an increase of 63.32 percent against January 2012 and recorded a decrease of 66.46 per- cent when compared to imports of December 2012. Gold imports in January 2013 stood at $12.196 million against imports of $7.459 million and $36.373 million in January 2012 and December 2012 respec- tively. The overall imports of metal group, registered an increase of 11.91 percent during July-January (2012- 13) against the same period last year. Metal imports during the period under review were recorded at $1.813 billion against imports of $1.62 billion during the same period last year. Imports of iron and steel scrap registered a growth of 17.28 percent during July-January (2012-13) com- pared to imports during July-January (2011-12). Iron and steel scrap imports into the country were recorded at $394.134 million during the first seven months of the current fiscal year against imports of $336.11 million during the same period last year. Gold imports surge 31.87% in July-January (2012-13) PRO 06-03-2013_Layout 1 3/6/2013 12:21 AM Page 1