KARACHI: The banking companies will suffer a sizeable revenue loss, owing to the government announcement of observing two weekly holidays, analysts said.
The government on Friday issued a notification to announce five-day working week under the national energy saving plan. The State Bank of Pakistan (SBP) also announced that all the offices of the central bank and other commercial banks would observe the same.
Several senior bank officials, when contacted, declined to comment on the issue. However, sources in the banking industry said that reduction in one business day would result in revenue loss for the banking companies on transactional charges.
The two-day closure would hurt the economy, which already faces challenges of the energy crisis and security conditions, analysts said.
The government should increase the number of working days and announce seven-day working week and make efforts to enhance power generation capacity, said Ahsan Mehanti, Chief Executive Officer, Shahzad Chamdia Securities.
“Reducing business days in a week is not the solution, it will further deteriorate the economic condition,î said Mehanti.
Regarding banking companies, he said that after a slump in 2008 the financial sector has managed to recover. “But such decision would affect banks profitability,” he added.
The banking sector remained resilient to the global financial turbulence in 2009 and the fundamental outlook for the sector is changing from neutral to positive in the current year.
Initially, the quantum of the loss cannot be estimated, but it will be translated in their annual financial statements.
“The banks will lose earning on the transactions used to take place on Saturdays. The overall loss of the banking sector would be shown in their annual reports,” said Khurram Shahzad, Head of Research InvestCap Securities.
The exchequer would also be deprived of the tax revenue it generated through the banking companies, he added.
Meanwhile, depositors, especially small traders expressing annoyance over the decision said, “It will invite law and order situation as sufficient cash would be held by retailers, wholesalers and dealers,” said Farid Qureshi, senior member, Karachi Grocers (Retail) Association.
Several banks were offering services till evening that helped the traders to deposit the cash, he added.
Normally, a number of retail outlets remained open on Sundays, he said, adding that in this case those traders would hold two daysí cash with them that would obviously become a security threat for them.
An office-bearer of the Karachi Wholesale Market Association said that the government should immediately withdraw the decision.
Source The News
No comments:
Post a Comment