ISLAMABAD              -      After announcing the relief package for the people affected by lock down across the country to contain COVID-19, the State Bank of Pakistan (SBP) has so far provided liquidity relief of over Rs 1 trillion to various sectors.  According to data issued by SBP, under the Rozgar Scheme , 291,172 businesses with around 865,000 employees have so far been provided Rs 92 billion financing.

Similarly 697,294 borrowers have been benefited with Rs 495 billion principal amount deferred while Rs 71 billion restructured or rescheduled. The data showed that 95 per cent out of total were small borrowers. Under the Rozgar Scheme, SBP had announce to finance up to 100 per cent of wages and salaries of businesses with average three months wage bill of up to Rs 500 million.

For businesses with three months wage bill exceeding Rs 500 million, SBP is financing up to 75 per cent with maximum financing of Rs 1 billion. The mark up rate has been set at 3 per cent and the end rate that would be charged from the borrowers will be up to 5 per cent per year. The SBP is providing refinance to banks at zero per cent mark-up rates.

Since March 17, the SBP has made drastic cuts in its interest rates by 5.25 per cent to 8 per cent and so far overall impact of policy rate cut is over 300 billion.

Under relief package announced by the SBP for households and businesses, the central bank has reduced the capital conservation buffer (CCB) from its existing level of 2.5 per cent to 1.5 per cent. This will enable banks to lend an additional amount of around Rs 800 billion, an amount equivalent to about 10 per cent of their current outstanding loans.

Likewise the existing regulatory retail limit of Rs 125 million per SME has been permanently enhanced to Rs 180 million with immediate effect. This measure is facilitating banks to provide more loans to SMEs which currently stand at around Rs 470 billion. For health sector, refinance facility up to Rs 500 million is being made available by SBP at 0 per cent to banks that can charge a maximum rate of 3 per cent per anum to hospitals and medical centres.

Similarly the exporters were required to show performance under the EFS schemes by end June 2020 and this period has been extended by six months to end December 2020.

The central bank has also enhanced the existing limit of $10,000 per invoice allowed to banks to make advance payment on behalf of manufacturing and industrial concerns and commercial importers for import of raw material spare parts and machinery to $2500. Under SBP TERF scheme banks provide financing at a maximum end user rate of 7 per cent for 10 years.