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Revision of Interest Rates in Gilgit-Baltistan Credit Cooperative Societies
On December 24, 2024, the Government of Gilgit-Baltistan, through the Office of the Registrar for Co-operative Societies, issued an important directive aimed at aligning interest rates in credit cooperative societies with the monetary policy of the State Bank of Pakistan (SBP).
Context and Background
The State Bank of Pakistan has progressively reduced its interest/discount rate, which currently stands at 13%. Despite this downward trend, credit cooperative societies in Gilgit-Baltistan continue to charge higher interest rates on loans and salary advances, causing concern among members and the public. This discrepancy has led to public criticism on social media, with demands for compliance with the revised SBP rates.
Key Highlights of the Directive
- The Registrar emphasized that cooperative societies must decrease interest rates to match the SBP's monetary policy changes.
- The directive aims to address public concerns and ensure financial inclusivity by lowering borrowing costs.
- It highlights the purpose of monetary policy: controlling inflation and influencing investment patterns positively.
- Credit cooperative societies are instructed to convene board meetings promptly to implement the revised interest rates and report back to the Registrar’s office.
Implications for Credit Cooperative Societies
Aligning interest rates with the SBP policy will ensure fairness and equity for borrowers in Gilgit-Baltistan. This change is expected to:
- Reduce financial burdens on cooperative society members.
- Encourage economic activity by making loans more affordable.
- Improve the credibility and public trust in cooperative societies.
Conclusion
The directive from the Registrar’s office underscores the importance of implementing national monetary policies at the grassroots level. By ensuring compliance, credit cooperative societies can support the broader economic goals of controlling inflation and promoting sustainable investment patterns. This initiative is a significant step toward fostering financial equity and inclusivity in Gilgit-Baltistan.
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