Adding Rs4 trillion in the banking system to revolutionize economy
our correspondent
islamabad
The trend of amassing local and foreign currency and prize bonds increasing in the business community and affluent that should be discouraged through policy intervention, a business leader said Sunday.
Discouraging accumulation of cash has become necessary to stop the expansion of the black economy as demanded by FATF, said, Shahid Rasheed Butt who has served as President ICCI and Patron ICST.
He said that currency and prize bonds of the large denomination have made taking and giving bribes and illegal transactions easier.
Shahid Rasheed Butt said that currency worth Rs2328 billion or 10.4 percent of the GDP was in circulation during 2013 which jumped to Rs5234 billion in 2018 and now it stands at almost Rs6 trillion which is almost half of the entire bank deposits.
The former government took the wrong steps to document economy which doubled the size of the cash economy to surpass the regional countries.
The business leader said that if the cash economy is brought to the level of 2013, it will increase bank deposits by almost Rs4 trillion, the government will generate revenue, interest rate would be reduced and banks would be more than willing to provide cheap credit to the private sector.
Such a step will change the overall economic scenario, result in radical changes in the system and trigger development at a fast pace.
He lauded the decision to register the prize bonds worth Rs40000 and demanded to register all prize bonds worth Rs946 billion.
The government should not press the businesspersons very hard to fulfill its documentation agenda as it can stoke the demand for dollars in the country bringing forex reserves under pressure, he warned.
