KARACHI: Pakistan Yarn Merchants Association (PYMA) has demanded the central bank remove restrictions on opening of Letter of Credits (LCs) for the textile industry.
In a statement issued on Thursday, the association apprised Jameel Ahmad, governor of State Bank of Pakistan (SBP) about the serious situation arising from the obstacles in the clearance of textile import raw materials, and requested that the textile industry, which was the backbone of the country’s economy, the facility of LCs should be restored to continue the production activities so that the clearance of imported raw materials can be possible.
In a letter to the Governor State Bank of Pakistan, Jameel Ahmed, PYMA Senior Vice Chairman Sohail Nisar pointed out that Polyester Filament Yarn 5402.4700, Polyester Textured Yarn 5402.3300, Pre Oriented Yarn 5402.4600, Polyester Spun Yarn 5509.2100 & 5509.5100, Polyester Sewing Thread 5402.6200, Viscose Filament yarn 5403.3100, Nylon Filament Yarn 5402.4500, Nylon Textured Stretch Yarn 5402.3100, 5402.3200 were the basic raw material of textile and without which the textile manufacturing segment cannot operate.
“There were numerous specifications within these HS codes that were either not domestically manufactured or not produced in significantly large quantities to meet domestic demand. Consequently, the only way to fulfil the raw material requirements of downstream users is through imports.”
The letter further stated that the raw materials covered in the above-mentioned HS Codes were not only used for the production of domestic goods, they were also used in the export sector which cannot fully finance itself therefore, PYMA members were the ones who facilitate this manufacturing segment. In this regard, PYMA members were facing undue delays from commercial banks in the opening of new Letters of Credits (LCs).
Furthermore, banks were also delaying the processing of shipping documents for long periods, resulting in high detention and demurrage charges for our members, while also creating a shortage of said raw materials in the local market.
Sohail Nisar requested the Governor State Bank that they treat the above-mentioned items as essential goods, and were further requested to instruct commercial banks to facilitate all transactions related to these HS codes on an expedited basis. In this matter, PYMA members will highly appreciate the central bank’s cooperation.