Banks defer repayments
KARACHI: Under the State Bank of Pakistan (SBP) relief package, banks have deferred principal repayment of loans worth Rs 20 billion of over 80 thousands borrowers to facilitate them during the COVID-19 outbreak.
On March 26, 2020, the State Bank of Pakistan (SBP) with consultation of Pakistan Banks Association (PBA) had announced a comprehensive relief package for borrowers and customers of the banking sector.
Under the relief package, banks and DFIs were asked to defer the payment of principal amount on loans and advances by one year to provide some financial relief to borrowers to cope with the impact of COVID-19 pandemic. As estimates the total amount of principal coming due over the next year is about Rs. 4.700 trillion.
The SBP on Wednesday issued some initial statistics of borrowers and banking customers, which have so far availed this facility.
According to SBP, under relief package, uptill Apr 10, 2020 some 80,368 bank borrowers have been benefitted from deferment of principal repayment. Overall worth Rs20 billion principal repayments of loans have been deferred. In addition, loans amounted to Rs. 1.4 billion has been restructured. While, some 5126 applications of banking customers are under process.
Bankers believed that this package will help relevant stakeholders including households and businesses, microfinance, SMEs, corporate, commercial, retail, and agriculture to manage their finances through this temporary phase of disruption.
As per the relief package, banks and DFIs will defer the payment of principal on loans and advances by one year and to avail this relaxation, borrowers should submit written requests to banks before 30th June 2020. However, borrowers will be required to pay the mark-up amount as per agreed terms and conditions. The deferment of principal will not affect borrower’s credit history and such facilities will also not be reported as restructured/rescheduled in the credit bureau’s data.—RIZWAN BHATTI