EXIM Bank created in response to IMF request
The government fulfilled another International Monetary Fund (IMF) condition for the bailout revival by passing the bill supporting the establishment of the Export-Import Bank of Pakistan through the National Assembly just before the session budgetary.
The IMF-backed export-import bank was one of the global lender’s conditions for getting the monetary program back on track. The government complied by passing the bill through the lower house of parliament in no time.
Through the Export-Import Bank of Pakistan (EXIM) Act 2022, the Federal Government must, by order, transfer all liabilities of the existing Exim Bank to the bank.
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The order will transfer all assets, rights, powers, privileges and all property, cash, bank balance, reserve funds, investments and all other interests and rights, debts, liabilities and obligations of the existing bank to the new one.
The bill stipulates that the registered capital of the bank will be one hundred billion rupees and the initial paid up capital of the bank will be 10 billion rupees divided into one billion fully paid shares at par value. The bank can borrow in local and foreign currency.
The purpose of the bank is to support, promote and develop international trade and commercial investment as well as to promote export-oriented import-substitution enterprises in accordance with the provisions of law and the national trade policies and programs of the federal government.
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According to the statement of purpose and motives, the Pakistani government is now seeking to establish the Export-Import Bank, as a national export credit agency.
He said the bank will promote, expand and diversify international trade by providing credit, guarantee and insurance products as well as ancillary services to exporters and importers, in the form of a statutory company. which enjoys the backing and support of the Government of Pakistan. as is customary for export credit agencies to achieve their potential and desired goals.
Under Section 25 (sovereign guarantee), the federal government guarantees all liabilities and obligations of the bank in connection with its business, subject to limits on the amount and duration of the sovereign guarantee which may, from time to time be notified by the federal government.
Article 26 (regulatory authority) states that the bank is subject to the regulatory oversight of the State Bank of Pakistan (SBP)
Under Section 28, the bank will provide a report on the results of the bank’s implementation of federal government national trade policies and programs at the end of each fiscal year through the Department of Finance.
Under section 29, strategic directions will emanate from the federal government if it is of the opinion that the bank is carrying on its business, operations and activities in a manner inconsistent with national trade policies and programs.
Section 32 (review and report to parliament) requires the federal government to review or cause to be reviewed the law, the bank and its operations three years after the effective date and every five years thereafter.
It stipulates that the federal government must submit a report on the review to both Houses of Parliament for consideration within one year of the start of the review.
Section 36 (tax exemption) states that any law currently in force relating to wealth tax, income tax, super tax, sales tax, excise tax or any other tax, the Bank shall not be liable for such taxes on its income, wealth or services.
Section 37 (protection of actions taken in good faith) of the bill provides that no suit, suit, reference or other legal proceeding shall be brought against the bank, its board of directors, its president, the president or any other director, officer, employee, advisers, consultants or experts for any omission, interpretation or determination made in good faith.