KARACHI: Finance Minister Ishaq Dar has assured banks that they would soon get Rs3 billion reimbursement of telegraphic transfer (TT) charges from the budgeted allocation of 2015-16.

Banks are paid for each transaction of remittances sent by overseas Pakistani workers. However, Rs3bn has been held up by the government.

The finance minister was in Karachi on Friday where he addressed the heads of banks along with the State Bank of Pakistan (SBP) Governor Ashraf Mahmood Wathra.

The minister said reserves would improve further and may touch $23bn by the end of this fiscal year. “We expect another $1bn from IFIs [international financial institutions] in the coming week,” he said.

While reiterating that Pakistan would not approach the International Monetary Fund (IMF) for another loan, Mr Dar said it was the first time that Pakistan was going to complete IMF Macro-economic Stabilisation Programme.

Elaborating the fiscal improvements, he stated that the budget deficit has improved to 4.3 per cent from 8.8pc three years ago without compromising on development budget. “The process of fiscal consolidation will continue to lower the deficit,” he said.

The government’s borrowing from the banking system has shrunk which has created space for the banks to lend to the private sector, he added.

He urged banks to take advantage of this space and increase credit to the private sector, particularly to the small and medium enterprises and microfinance sectors as well as to the housing sector. To promote mortgage financing in the country, he stressed the importance of having a foreclosure law because “without such laws housing finance cannot be promoted”.

The minister said that economic parameters have recorded significant improvement over the last three years and it was time to accelerate the growth momentum of the economy.

Appreciating State Bank’s efforts in the financial sector, he said its monetary policy has played a great role in achieving economic turnaround. “SBP’s efforts with regard to financial inclusion have earned international recognition,” he said.

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