KARACHI: The government can generate whatever amount it needs by floating nine-month term finance certificates at lower rates instead of borrowing costly loans from banks.

This was stated by the president of Summit Bank, Hussain Lawai, while addressing the members of Karachi Stock Exchange at the trading hall here Tuesday.

“I can guarantee a rate of KIBOR plus 1 or 1-1/2 percent to the government on these TFCs, which can come down to less than half after some time, he added.

He said the government must tap capital market and give up banks' borrowing to reduce the financial cost. It will also create liquidity in the market, he noted.

Lawai, a seasoned banker, said that five large banks were rolling in the profits and mid-size banks were mingled in several issues while smaller banks are to face very very tough time ahead.

He said the mergers and amalgamation are the right options for smaller and mid-size bank for their survival.

Quoting his example, Lawai said that he has successfully merged three banks to create Summit Bank and by the end of this year we will be a mid size bank and our NPL issue will be addressed.

He said that Pakistan has given us a lot and its now time to pay back to motherland. It is our duty to also give some thing to this country, he opined.

Lawai said that his bank is ready to provide a credit line of minimum Rs 50 million to each of KSE's member.

Earlier, KSE managing director Nadeem Naqvi said that stock market was passing through a difficult time, but the premier exchange will be behind its member and continue to serve.

Later, Lawai rang the bell in the trading hall.