Sunday, 5 February 2012


In his article,written in2008,"Performance of Banking Sector in Pakistan,Dr Shahid Hassan Siddiqui writes:-
During last six years or so,SBP(State Bank Of Pakistan)has particularly adopted a policy of encouraging auction of Pakistani banks to foreigners.This policy is fraught with risks as banks are very powerful institutions.It is therefore,in national interest that the share of foreign banks' deposits in the total deposits is kept at a low level.In any case,the bulk of income of banks operating in Pakistan is in local currency but the profit of banks owned by foreigners is to be remitted in foreign currency.This, along with other factors,will have serious strain on current account deficit and on foreign exchange reserves as also on Rupee-Dollar parity in coming years. We may therefore,well see depreciation in the value of local currency.The share of foreign banks' deposits in the total deposits of the banking sector in 1992 was only 14 percent but the share of foreign stake has now increased to over 50 percent.
The prevailing situation reminds us of the era of East India Company.We are witnessing the re-colonization of the state of Pakistan due to the policies of"Viceroy and financial Viceroys.It appears that SBP is working like minor regional office of the US Federal Reserve System. Dr Hassan-uz-Zaman,while observing that abundance of multi-national corporations is regarded as stratagem to pave the way for economic imperialism by the industrialized nations,says:-
"Dr Shahid Hasan Sadiqui has warned the government of Pakistan to be careful in transferring the privatized industrial and financial institutions to foreign investors because they might emerge as a new East India Company"
It was in 1997 that we had cautioned the government by saying" would not be prudent to sell the public sector banks to foreigners.If these banks are sold to foreigners,banks controlled by foreigners,including existing foreign banks,will emerge as most powerful tycoon.
With reference to Rupee-Dollar parity, it is interesting to see that between 2001-2007 the exchange rate remained almost the same but with start of rise in oil prices and lawyers movement in Pakistan,the rupee totally collapsed,said the Overseas Pakistani Friends( However ,a US dollar was equal to 66.62 on 30 May 2008(Buying OD/T.CHQ) and on 6th January it is stood at 89.87 with the increase of Rupees.23.22.How much effected the above cause,the Pak Rupee,the figures can be seen.Entire position can be known from this  single aspect.
But now we have to state here that, in17th  century a Sufi poet,Shah Abdul Latif Bhittai, has warned the people of Indian Sub-continent for bad effects of the East India Company,as we have discussed in our three old posts of this blog,why we can not judge the factual position?
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