Negative rate of return eroding savings

KARACHI: Masses should consider taking out their savings from banks and invest their savings in businesses so that they can get return while economy can become self-reliant, a leading businessman said Wednesday.

Many leading banks are known for negative rate of return while depreciation has also taken tool on the local currency which calls for proper decision by masses that lack protection, said Mian Shahid, Chairman of United International Group (UIG).

Speaking to the officials of the Group after premier rating agency PACRA upgraded the IFS rating of UIG’s member company United Insurance, he said that some commercial banks are not willing to lend to SMEs worrying more about their balance-sheet.

This situation is an opportunity for the microfinance banks to come forward to serve the SMEs and millions of unbanked population, he said.

Mian Shahid said that majority of the Pakistanis are accustomed by now to banks offering around zero interest rates on their savings accounts which only guarantee better profits with no one to claim the share.

Commercial banks have been parking large sums of money in the central bank which provides reassurance to bankers, regulators and investors but leaves little room for private sector credit that could provide a boost to limping economy, he added.

He noted that the holdings of Pakistanis in the Swiss banks have surpassed the deposits of Indians. Dollar 97 billion deposited in one international bank belonged to Pakistani citizens enough to clear all the foreign and domestic debt.

Stressing on honesty and service, he said that PACRA has upgraded the rating of the United Insurance Company to A+ for which all the credit goes to the employees that are in fact partner in the journey.

He asked staff of UIG to sustain their market position while ensuring stable performance as demonstrated in the past.

Member companies of UIG believe in health for all therefore we have offered medical insurance while APNA Microfinance Bank has been serving masses through record disbursements while we initiated crop and livestock insurance in Pakistan.