SBP says 700 firms seek subsidised loans to avoid layoffs

KARACHI: The State Bank of Pakistan (SBP) said on Monday that around 700 companies have forwarded applications for cheaper loans under the central bank’s policy to protect employees being sacked from their jobs amid the coronavirus lockdown.

The central bank, in a statement, said so far the commercial banks have deferred loans of Rs236 billion for a year in line with the SBP’s guidelines due to suspension of economic activities in the country.

Currently the banks are reviewing 5,126 applications of loans deferment.

On April 11, SBP launched a refinancing scheme to save hundreds and thousands of jobs in the private sector by providing cheaper loans to businesses at 4 to 5 per cent for payment of wages and salaries.

The bank said the scheme has been designed to benefit small and medium-sized enterprises.

Earlier, in order to strengthen the health sector in the fight against the deadly virus, SBP on Friday last enhanced the maximum financing limit per hospital or medical centre under its refinance scheme from Rs200 million to Rs500 million.

According to a series of tweets by SBP, a single hospital or medical centre could now acquire up to Rs500 million worth of loans under its Refinance Facility for Combating COVID -19 (RFCC). Previously, the financing limit was Rs200 million.

“The RFCC is an emergency funding facility to support hospitals/medical centres to develop their capacities for treatment of infected patients of COVID-19,” the central bank said, adding the financing under this facility is being made available by the bank at zero per cent to banks that could charge a maximum rate of 3 per cent per annum.

The central bank has been continuously improving features of this facility to ensure timely financial support to hospitals and medical centres engaged in combating COVID-19.

So far, SBP said, financing of Rs2.2 billion has been approved for 11 hospitals/medical centres, whereas financing requests of Rs3.6 billion for 23 hospitals/medical centres are being processed by the banks.

With the enhancement of financing limit, SBP said it is expected that large-scale facilities will be created for treating COVID-19 patients by using subsidised funding being extended under this facility.

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