The Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, has emphasized the urgent need to revive the Export and Import (Exim) Bank, calling it a critical pillar for achieving export-led economic growth. Speaking at a meeting of the Senate’s Standing Committee on Finance, the minister outlined the government’s commitment to ensuring the bank’s operational readiness as a top priority.
Senator Salim Mandviwalla, who chairs the committee, expressed concern over delays in making the Exim Bank fully functional, pointing to the absence of a CEO for over two years. He described the current state of the bank as “fragile” but acknowledged recent progress. To ensure accountability, the committee resolved to conduct quarterly reviews of the bank’s performance.
The finance minister highlighted Exim Bank’s potential to significantly bolster exports over the next two to three years, citing the stabilizing economy as a foundation for future growth. He noted that recent government measures have reduced the policy rate by 9 basis points, bringing the Karachi Interbank Offered Rate (KIBOR) below 12%. This development has halved borrowing costs, and its positive impact is expected to materialize in the coming months.
The committee was briefed on Exim Bank’s current activities, including the management of Rs421 billion under the export finance scheme and a Rs230 billion enhancement approved by the prime minister. The bank allocates 40% of its resources to small and medium enterprises (SMEs) and 60% to corporate entities. Notably, Exim Bank exceeded its first-year target under the International Monetary Fund (IMF) structural benchmark, achieving 168% of the goal.
Addressing inflation, Senator Aurangzeb admitted that middlemen are resisting price reductions for essential goods despite falling global commodity and oil prices. He stressed the need for stronger administrative measures to curb price manipulation and alleviate pressure on consumers.
On broader economic policies, the minister reiterated Pakistan’s commitment to the IMF loan program, emphasizing its role in ensuring structured and sustainable growth. However, he warned against overly aggressive economic acceleration, cautioning that balance of payments issues from past missteps should not be repeated.
The committee also discussed Federal Excise Duty (FED) on electric vehicles (EVs). Federal Board of Revenue (FBR) officials clarified that no FED would be levied on EVs, citing a legal opinion from the Ministry of Law and Justice.
Another key topic was remittances under the Pakistan Remittances Initiative (PRI). State Bank of Pakistan (SBP) officials reported a dramatic rise in remittances from $7-8 billion in 2009 to an expected $35 billion this fiscal year. Last year, the SBP paid Rs86 billion to banks to cover remittance-related charges. The committee requested detailed, year-wise data on remittances and the associated fees paid by the SBP.
Additionally, the meeting addressed issues related to pay fixation for Senate Secretariat staff. Officials from the Accountant General Pakistan Revenues (AGPR) stated that the relevant policy no longer exists and that the matter is pending resolution in court.
The revival of the Exim Bank and other economic reforms discussed reflect the government’s focus on enhancing Pakistan’s fiscal stability and export competitiveness in the face of ongoing challenges.