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News Clips 05 November, 2015

[ PRGMEA urges government to announce relief package ]
[ SBP issues payment guidelines for POs, DDs ]
[ Active websites mandatory for companies: SECP ]
[ Govt likely to reduce regulatory duty on cotton yarn import ]

PRGMEA urges government to announce relief package   [ top ]

Business Recorder, November 05, 2015
Pakistan Ready-made Garments Manufacturers and Exporters Association's (PRGMEA) central chairman Shaikh Mohammad Shafiq and South Zone chief Irfan Ali on Wednesday demanded of the government to immediately announce a relief package for textile industry. 

The textile industry that was earlier badly affected due to lingering electricity and gas crises was now facing another crisis in the wake of imposition of regulatory duty on the import of cotton yarn, they added. Through an SOS message, both the office-bearers of the PRGMEA, appealed to the prime minister to immediately announce a relief package for the textile industry in order to overcome the issue of fast-declining exports and losing market share in the global textile trade. 

They deplored that though Pakistan is the 5th largest cotton producing country, its performance in value addition has been a dismal failure. According to Pakistan Bureau of Statistics (PBS), textile exports have declined to $1.093 billion in September 2015 from $1.110 billion over the previous month of August 2015, reflecting a decline of 1.52 per cent. 

The PRGMEA office-bearers said that it was because of deteriorating law and order and shortage of electricity and gas, factories were unable to operate smoothly for ensuring timely delivery of whatever limited orders they had managed to get from foreign buyers. They urged the government to immediately withdraw the regulatory duty imposed on the import of cotton yarn. 

SBP issues payment guidelines for POs, DDs    [ top ]

Daily Times, November 05, 2015 
KARACHI: The State Bank of Pakistan (SBP) has issued guidelines on standardisation of layout and security features of payment orders (POs) and demand drafts (DDs).

The move is aimed at addressing the risk of fraud, forging in POs and DDs and to safeguard the interests of general public by reducing the risk of counterfeiting.

The said guidelines mandate the use of "Minimum Security Features" in the paper used in printing of POs and DDs comprising of watermark, anti-forgery ink and ultraviolet fibres. In the area of layout, Magnetic Ink Character Recognition (MICR) line, name of Drawee Bank Branch (in case of DD) and maintenance of purchaser's record by the respective bank branch have been introduced.

Moreover, to facilitate customers, the banks/MFBs have been advised to devise a centralised mechanism for the verification of genuineness of POs and DDs.

In this regard, the banks are required to set up 24/7 helpdesks/call centres, so that the person in possession of instruments is easily able to verify the genuineness of the instrument.

The bank branch shall validate the genuineness of PO/DD if the holder of an instrument approaches in person to any branch offering online banking services. The banks are also required to arrange proper training of staff to examine/verify the security features/genuineness of PO/DD.

It may be recalled that last year, SBP had issued instructions for standardisation of security features and layout of cheques. Now by standardising POs and DDs, almost 96% of total financial instruments in clearing process would be standardised, resulting in uniformity and increased efficiency in the process as well as facilitation of general public using them.

All the banks and MFBs have been advised to issue POs and DDs as per the new standard with effect from April 1, 2016. 

Active websites mandatory for companies: SECP   [ top ]

DAWN, November 05, 2015
ISLAMABAD: Taking serious note of non-compliance, the Securities and Exchange Commission of Pakistan (SECP) has issued directions to 496 public non-listed companies to ensure that they operate functional company websites by the end of December 2015. 

The corporate sector regulator had earlier notified all listed and non-listed companies in July 2014 to maintain active websites having detailed information about the company, its objectives, governance structure, election of directors and financial position to benefit its members, potential investors, and the general public. 

However, in July 2015 the companies were further directed to place the web link of JamaPunji, an investor education programme developed by the SECP, on their websites. 

Govt likely to reduce regulatory duty on cotton yarn import   [ top ]

Daily Times, November 04, 2015
KARACHI: A source in the Ministry of Finance has hinted that the government is likely to consider reduction in regulatory duty on the import of cotton yarn to benefit the garment sector.

The cotton yarn, fabric commercial and value addition sector exporters are now facing 10% regulatory duty on imports from November 1, 2015.

The Pakistan Apparel Forum (PAF) said the value added apparel sector was representing Pakistan Hosiery Manufacturers and Exporters Association (PHMEA), Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), Pakistan Knitwear and Sweater Exporters Association (PKSEA) and Pakistan Cotton Fashion Apparel Manufacturers and Exporters Association (PCFAMEA), who were major stakeholders of the value added apparel sector.

The performance of value addition by woven garments sector is 846%, hosiery/knit garments 616% and spinning sector is 59%.

In the recent meeting with Finance Minister Ishaq Dar, the representatives of the sector assured support in this regard. Dar informed them that the value added textile sector could avail benefits from Duty and Tax Remission for Export (DTRE) scheme and they would not be affected from the said regulatory duty. But on the other hand, the DTRE secretary said that this facility was currently not available in the DTRE scheme.

Even Pakistan Customs under Federal Board of Revenue (FBR) is not allowing DTRE facility to those small and medium units of the sector, who do not have 100% in-house manufacturing facilities, said a PAF spokesman.

In DTRE rules, there is no restriction for stitching units, manufacturing cum exporters for duty free import of raw material including cotton yarn.

The exporters of textile garments sector have proposed the government to authorise the textile ministry to grant permission to textile units for import of raw material under the DTRE scheme.

The PAF spokesman said that the import of Indian fabric is already banned as per the import policy 2012-15 and our government has imposed 10% regulatory duty on import of fabric from India. The 90% value added textile sector does not take long term financing and majority of small and medium units do not take export refinance, he added.

He said the regulatory duty would destroy the small and medium size units, which provides huge employment including poor female workers, who work on stitching machines and the government wants to create unemployment, chaos and disaster.

"All over the world, export of raw material is greatly discouraged and restricted while import of raw material is always allowed just because of value addition and earning more foreign exchange. In comparison to this, in Pakistan, it is opposite and essential raw material for value additions is allowed to be exported," he added.

Exports of readymade garments have increased nearly four times in value from 1990 to 2015, from $1 billion in 1990 to $4 billion.