SME RICE EXPORTERS ADVISED TO SEEK REMEDY FROM BANKING MOHTASIB….UNISAME

The Union of Small and Medium Enterprises (UNISAME) has advised the SME rice exporters to seek remedy from Banking Mohtasib (Ombudsman) for difficulties caused due to misinterpretation of sanctions by the banking sector and unlawful blocking of remittances of overseas banks to SME rice exporters to Iran and urged the release of funds in the best interest of justice.

President UNISAME Zulfikar Thaver invited the kind attention of the office of the Banking Mohtasib to the freezing of funds remitted by the buyers to Pakistani exporters who are in turmoil due to non release of payments effected by Iranian importers. The rice exporters are facing financial hardships due to the uncalled behavior of the authorised dealers who are not releasing the funds causing problems to the exporters.When there is no violation of the rules and regulations then why the banks are afraid of negotiating bills and in cases where they have endorsed the form E and the relevant remittance received they are not crediting the account of the shippers with the realization he argued.

He added that the banks are obliged to discount bills drawn on buyers and if in any particular case where there are discrepancies, the bank is supposed to request the client to remove the discrepancies but mere refusal to accept documents or on receipt of payment from the buyer either as advance payment or against the value of the goods the bank as authorized dealer is duty bound to credit the account of the shipper.

Thaver said the banks have Iran phobia and are not prepared to even touch the documents pertaining to Iran and it is very essential in the interest of trade that the State Bank of Pakistan as the regulator educate the banks that the sanctions are not applicable for food and medicine.

He urged the honourable Banking Mohtasib to recommend to the State Bank of Pakistan (SBP) to direct the concerned banks to release the payments received by the banks to the SME exporters and also pay them profit for the period the amount remained blocked in the treasury of the banks.

He submitted that the payments were received against exports of rice which does not come under the purview of the sanctions imposed on Iran as there is no bar on the export of food and medicines under the United Nations Charter and trade in food and medicines is permitted.

He further submitted that the goods were exported under proper endorsement of the ” Form E” legally and all documents are in order and duly stamped and signed and routed through proper banking channels.

He pleaded that the rice exporters are badly affected by the non release of funds and the rice exports to Iran have come to a standstill due the misinterpretation and negative step of the financial institutions without studying the facts of the case and corresponding law on sanctions.

He requested the Rice Exporters Association of Pakistan (REAP) not to do dharna or block the I.I.Chundrigar road as reported in the press but instead seek remedy from the legal forums in an appropriate manner as it is their right.

The chairman , vice chairman and the managing committee (MC) of REAP are conscious of the issues and the MC comprises of educated exporters who understand that as representatives of the rice exporters big and small they need to advocate the cause of the sector diligently by proper application of legal systems and it is necessary that they make efforts to resolve the issues at all levels. He appreciated the efforts of the young vice chairman REAP Ch. Samiullah and his sincerity to resolve the issue.

As member of the National Committee for SMEs (NCSMEs), Thaver offered all help and support to REAP to resolve the issue in the larger interest of the entire supply chain which is suffering due to the loss of the Iranian rice market. By blocking official remittances the government is encouraging smuggling and illegal border and barter trade.