COMMERCIAL BANKS STILL IN THE PROCESS OF INTERNATIONAL RISK MANAGEMENT FOR TRADE WITH IRAN

The Union of Small and Medium Enterprises (UNISAME) appreciated the efforts of the State Bank of Pakistan (SBP) for facilitating trade with Iran and giving the commercial banks the go ahead for import and export with Iran.However the delay in resumption of trade activities is due to commercial banks who are still in the process of sharpening their international risk management departments.

President UNISAME Zulfikar Thaver urged the commercial banks to expedite their process to be ready for facilitating import and export business with Iran as it now appears on the list of countries with which trade is allowed without sanctions.

He said the SME rice exporters to Iran are anxiously waiting for the commercial banks to accept letter of credits from Iranian buyers and the facility of discounting of bills drawn on Iranian buyers.
Likewise exporters of several other commodities, textiles need facilities for trading with Iran.
Many Pakistani importers also need to import plastic granules, petroleum products and chemicals from Iran and wish to open letter of credits in favour of Iranian exporters. They all are waiting for the commercial banks to give the go ahead.

Thaver said the commercial banks of Pakistan are determining the list of Iranian banks with whom they can deal and also determining the credit limits of each bank. The international risk management department is working to ascertain the extent of risk according to the rating of the Iranian banks.

He said in the past the trading was done through Dubai banks as intermediary but it proved costly due to cost of finance and bank charges which the trader had to pay to both the banks.

It is very important that the commercial banks move fast in the matter because our neighboring countries and competitors have outlined the procedures and are ready for business with Iran whereas our commercial banks are slow and not taking prompt actions in this direction.

It is understandable that there has been a long lapse of time but nevertheless the commercial banks have their list of corresponding banks in Iran who have grown over a period of time into huge banking institutions and deserve higher ratings.

Thaver urged the SBP to direct the commercial banks to submit their list of correspondents in Iran and also the limits of Iranian banks approved by the respective banks for both import and exports to and from Iran promptly

Posted in: Press Releases