Lahore-The Pakistan Industrial and Traders Association Front, while taking up its concern with the central bank officials over the implementation of various refinancing schemes for industry to deal with the challenges posed by coronavirus, urged the authorities to also ensure provision of this facility by the commercial banks on urgent basis to the small businesses, which are facing severe financial crisis.

The PIAF chairman Mian Nauman Kabir and LCCI president Irfan Iqbal Sheikh, in an online meeting with SBP chief manager Javaid Iqbal Marath, urged him to simplify the procedures to obtain loans under refinancing scheme, besides restricting all commercial banks to facilitate the trade and industry especially the documented and registered SMEs. The central bank should take serious action against those commercial banks which are refusing to facilitate the businesses, he suggested.

The meeting was attended by a large number of PIAF members, senior vice chairman Nasir Hameed, vice chairman Javed Siddiqi, SBP DCM Miss Huma Mehmood, DFD Ali Atta and senior officer Rehan Mehmood.

SBP chief manager Javaid Iqbal Marath, addressing the meeting, observed that as COVID-19 is straining economic activity, governments as well as central banks are taking extraordinary measures to address the challenges associated with this situation. Similarly, State Bank of Pakistan is taking a range of measures to protect the safety of public and address the economic impact. In this context, SBP has taken a number of policy measures, including Temporary Economic Refinance Facility, Islamic Temporary Economic Refinance Facility (ITERF), Refinance Scheme for Payment of Wages & Salaries to the Workers etc.

PIAF Chairman Mian Nauman Kabir, in the meeting, hailed the approval of relief packages of billions of rupees by the SBP, urging the authorities to also ensure provision of this facility on urgent basis to the small businesses.

Nauman Kabir said that on April 22, the State Bank had announced incentive package to help businesses avoid layoffs while directing banks to provide refinancing at zero percent. He added that earlier on April 10, the central bank had also announced an incentive scheme entitled Refinance Scheme for Payment of Wages and Salaries to the Workers, enabling provision of concessional credit for payroll finance to businesses that commit to not lay off workers for the next three months. But the reality is that banks have refused to offer such loans, except extending only Term Finance Funding, with a restriction of on-time payment of markup and other conditions. He said that the banks officials say that they have no instructions from the government in this regard which is very unfortunate.

LCCI president Irfan Iqbal Sheikh, who is also former PIAF chairman, urged the central bank to open its all branches, as limited branches of the commercial banks are providing services which create rush and troubles for the consumers.

He stated that the actual position is that the government has announced relief for the large industry by reducing interest rate but the SMEs, which are actually a backbone of the economy, are still waiting for some relief.

Irfan Iqbal Sheikh said that presently, the SMEs cannot take loan for their workers salaries at 4% markup from banks without approved limits.

The PIAF leadership suggested the central bank to devise a policy for provision of soft loans for filers and documented businesses on very nominal interest rate so that they could bear their running cost and pay the salaries to their workers.