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Breakthrough in deposit mobilisation.

In consonance with the Government's policies aimed at stimulating the growth of industrial investment in rural areas, the IDBP sanctioned an amount of Rs. 1478 million of reestablishment of industries in less developed and specified rural areas of the country which constituted 71 per cent of the total loans sanctioned by IDBP during 1990-91.

The Industrial Development Bank of Pakistan has for the second consecutive year achieved significant improvements in almost all indicators of its operations during 1990-91 which include sanction of financial assistance, disbursement of loans, recoveries of outstanding dues, deposit mobilization and profitability. This was stated by Mr. Abdur Rahman, Managing Director, IDBP while addressing 30th Annual General Meeting of the Bank's Shareholders held at Lahore recently.

Mr. Rahman informed the Shareholders that despite various constraints including tight credit control, law and order situation, infrastructural deficiencies etc., the upsurge in IDBP's operational achievements was the result of a series of management initiatives and adoption of measures best suited to the Bank at appropriate juncture. He also presented the Bank's Annual Report 1990-91 to the Shareholders which is published for the first time both in English and Urdu.

According to the Bank's Annual Report, approval of financial assistance during 1990-91 amounted to Rs. 2090.4 million including foreign exchange component equivalent to Rs. 1106 million as against Rs. 1600.4 million approved in 1989-90 which included Rs. 637.42 million in foreign exchange, thus registering an increase of 31 per cent over last year's level. Out of the total assistance approved, Rs. 1859.8 million or 89 per cent of total sanctions, were approved in favour of 119 new industrial units which reflected the Bank's continued efforts for induction of new entrepreneurs and broadening the base of manufacturing sector.

In consonance with the Government's policies aimed at stimulating the growth of industrial investment in rural areas, the Bank sanctioned an amount of Rs. 1478 million of reestablishment of industries in less developed and specified rural areas of the country which constituted 71 per cent of the total loans sanctioned by IDBP during 1990-91.

The report says that the Bank laid special emphasis during 1990-91 period on the disbursements of sanctioned loans to ensure speedy generation of goods and services. The disbursements thus increased by 11 per cent to Rs. 1227.8 million during 1990-91 compared to Rs. 1114.5 million disbursed during the preceding year. Disbursement of working capital loans also increased by 44 per cent from the level of previous year to Rs. 1756 million during 1990-91. As a result of increased attention on disbursement of loans, number of projects completed during 1990-91, aggregated 176 which involved Rs. 1131.8 million loans as against 104 projects involving Rs. 656.8 million loans completed last year. The projects completed during the period under report were estimated to generate about 6230 new employment opportunities, which is higher by 57 per cent from 3976 new job opportunities created through projects completed during the preceding year. The foreign exchange earning potential through projects completed in 1990-91 as estimated at Rs. 1198 million per annum.

The IDBP's Annual Report 1990-91 adds that the operations of the Bank towards recovery of outstanding dues resulted in tremendous success when dues amounting to Rs. 1211.9 million were recovered which were 28 per cent higher than the highest ever recoveries totalling Rs. 949.4 million recorded in 1989-90. The shared of current dues in total amount of recoveries made during the period worked out to 85 per cent.

The IDBP also recorded a breakthrough in deposit mobilization which stood at Rs. 2523 million at the close of financial year 1990-91 as against total deposits amounting to Rs. 633 million mobilized during preceding year registering a significant increase of 299 per cent.

The Bank also introduced a new financing instrument Sanati Sarmaya Certificate, and made new issues of IDBP Deposit Certificate which together yielded a total amount of Rs. 1200 million thus helping the Bank strengthen its local currency resource base.

Effective financial management and judicious use of resources contributed towards increase in the IDBP's income. The pretax profit earned by IDBP during 1990-91 increased to Rs. 152 million from Rs. 141 million earned during last year.

The Shareholders of IDBP took note of the significant turnaround achieved by the Bank since 1988-89 when it faced a major financial crisis.
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Publication:Economic Review
Date:Dec 1, 1991
Words:723
Previous Article:General Tyre - a profile.
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