KARACHI, Nov 27: A six-member committee of business leaders and representatives of the central bank and commercial banks has been formed to have a hard look at the banks spread, loan rates, service charges and problems of the manufacturing industry.

The committee was formed in a meeting of State Bank Governor Dr Shamshad Akhtar with the leaders of business and industry at the Federation of Pakistan Chambers of Commerce and Industry on Monday.

Included in the committee are three business leaders - Amjad Rashid Sheikh, Mirza Ikhtiar Baig and Zubair Tufail, a leading banker Mr Naveed, and two directors of the SBP from research and export refinance.

“The committee will meet late this week or early next week to set its terms of reference,’’ disclosed a business leader who participated in the meeting. He, however, added that the committee will primarily address the issue of high financial cost that has virtually crippled the industry.Formation of the committee came after the State Bank governor and President of National Bank of Pakistan Mr Ali Reza came down rather harshly on the textile sector, when the FPCCI President Tanvir Sheikh informed them about closure of more than 100 textile mills.

“Please, give me the names of closed textile mills with their balance sheets and all other relevant information and data,’’ the SBP governor is reported to have demanded after she refused to accept that there was any crisis in the textile sector.

But to her surprise the participants of the meeting refused to disclose the names of closed mills on the ground “that any information about closure or partial operation of any textile mill will bring it under pressure of the banker for quick clearance of outstanding loan,’’ one of the textile mill owner in the meeting is reported to have explained.

Businessmen say the distressed industrial unit comes instantly under heavy pressure of the lending bank or banks once the information about its problems is leaked out. The NBP president attributed the distresses of the textile sector to ineptness of textile tycoons and his question was: “How many MBAs and professionals you have engaged to run your business.’’

In the heat of discussion, the issue of Kibor was raised in the context of rising financial charges. “Kibor is manipulated by market forces and needs to be reviewed if it is considered necessary,’’ businessmen who attended the Monday meeting at the FPCCI quoted the SBP governor as saying, “I hope there are no media persons around.’’

The governor was reported to have made these remarks when she realised implications of her off the cuff remarks. “Don’t blow this issue out of proportion,’’ cautioned a source who was sharing information of a meeting with the SBP governor where no journalist was present.

Ali Reza was not happy with businessmen making frequent references to low bank rates of 3 and 4 per cent about six or seven years ago. He urged them to realise that the bank rates had down to this lowest level of 3 and 4 per cent in 2000 and 2001 only for two years in about last eight years. “It was done to kick start the economy,’’ he added.

The SBP governor in her speech said that the bank rate was not being lowered for the fear that it would fire inflation in the country.

Many businessmen were not happy to note that the saving account holders of the banks were being given a raw deal. “Nowhere in the world the savers are treated so shabbily as in Pakistan,’’ one of the participant remarked who reminded the governor of her promise made in early December last year at the time of launching 2005-06 annual report when she declared to have a straight talk with the bankers on rate of return being offered to saving account holders.

But there were many businessmen, who attributed the widening of banking spread to expenditure on lavish perks and cash rewards for the top and senior bankers rather than on improving services and reaching the right people with right investment.