ISLAMABAD, Dec 25: The banking sector of the country was not capable of financing the Iran-Pakistan gas pipeline but the State Bank could raise funds for the project by launching bonds, Adnan Adil Hussain, senior vice-president for consumer and retail banking at the National Bank, said on Tuesday.

Talking to reporters, he said his bank entered such ventures only on the basis of commercial viability. “We are already in a consortium to finance the Neelum-Jhelum power project.

“However, entering the IP pipeline project is possible if the central bank gives guidelines,” he said.

Mr Hussain said the best way to fund the gas pipeline would be to launch bonds like the Sukuk bonds or any other such product.

“The best way is to get the financing from the public and private investors because the banking sector of the country is not large enough to provide finance for such a huge project.”

The estimated cost of the project to import natural gas from Iran is around Rs250 billion.While Iran has built more than 900km of the pipeline on its side of the border, the work is Pakistan is yet to begin.

The Prime Minister’s Adviser on Petroleum Dr Asim Hussain has said that project is expected to be operational by 2014. Speaking about the achievements of the NBP, Mr Adil said it was not working for profit only and it had presence in remote areas where no other bank was operating.

He said the ‘Advance Salary Personal Loan’ facility would be made available to the private sector too.

He said many products had been launched by the bank not for business growth only but to provide access to finance for the masses, including the ‘Cash for Gold’ product.

Of the 44 banks operating in the country, the NBP has the largest agricultural disbursements with an outreach to 250,000 farmers.

Mr Adil said the National Bank was serving more than 1.8 million pensioners without any surcharge or margin. Due to the cumbersome nature of this responsibility, no other bank has sought a share in disbursing pensions every month.