Banks are responsible for economic crisis: KATI President

Banks are responsible for economic crisis: KATI President

KARACHI: Faraz-ur-Rehman, President, Korangi Association of Trade and Industry (KATI) on Tuesday blamed commercial banks for present economic crisis in the country.

He expressed his concern over increasing the price of the dollar by 25 rupees at once and the price of the dollar exceeding 260 rupees, saying it is disastrous for the country and the economy.

READ MORE: Documentation must to bridge fiscal deficit: FPCCI

Faraz-ur-Rehman said that an attempt was made to control the dollar by placing a cap first, but after the failure, now the result of removing the cap is in front of everyone, the value of the dollar has broken all records in history.

President KATI said that despite seeing such a huge increase in the value of the dollar, it is a matter of concern that the government, especially the Ministry of Finance, does not take any action.

READ MORE: FPCCI warns black economy to boost on high interest rate

Faraz-ur-Rehman said that the real reason for the increase in the value of the dollar is the inflexibility of the commercial banks which brought the country to this point and no one is taking action against them. He said that the commercial banks charged more than the open market during the cap and not only damaged exports but also created a black market, after which dollars were bought and sold at the arbitrary rate of the banks instead of the official rate.

READ MORE: KATI terms benchmark interest rate hike as disastrous

Due to the same reason, the business of Hawala Hundi flourished, there was a shortage of foreign exchange and remittances also fell.

President KATI said that the State Bank, which is also the regulator of banks, is not taking any action despite being aware of the situation. He said that the Central Bank should take strict action against the commercial banks under the powers set by the Constitution of Pakistan and give severe punishments to those responsible for harming the country’s economy.

READ MORE: KCCI hails decision to waive demurrage, port charges

Faraz-ur-Rehman further said that unless the behavior of commercial banks is corrected, it is impossible to end the black market of the dollar.