SBP reduces markup by 5 percent to boost long term investment

KARACHI: In the wake of the COVID-19 pandemic, the State Bank of Pakistan (SBP) has introduced fresh measures to facilitate the business community in order to promote long term investment.

According to a statement issued on Wednesday, the SBP has announced to reduces markup rate on investment under SBP’s Temporary Economic Refinance Facility (TERF) to 5 percent from the previous 7pc, and on Long Term Financing Facility for the non-textile sector to 5pc from 6pc to extend the benefit of the recent reductions in the policy rate.

Furthermore, the central bank has also allowed the TERF facility in cases where LCs/Inland LCs were opened prior but retiring after the introduction of scheme on 17Mar20. It may be mentioned here that the TERF facility was introduced to provide a time-bound incentive for investment in all sectors.

SBP on Tuesday stated that it has extended the Deferment of Principal Amount of Loans facility for the next three months to provide some more relief to the banks’ borrowers in the wake of Covid-19.

Considering the fact that the Covid-19 pandemic is continuing to stress the cash flow of small and medium-sized businesses and households, the SBP has decided to extend the Deferment of Principal Amount facility up till 30th September 2020.