SBP reduces markup rate to 5 percent on refinance schemes for investment and introduces other enhancements

Taking cognizance of the negative fallout of COVID-19 Pandemic for the economy, State Bank of Pakistan (SBP) has been constantly taking steps to safeguard the businesses and households and a reduction in the policy rate has been a key step since March 2020. SBP has reduced the policy rate by 625 basis points since 17th March, 2020 to 7 percent. To extend the benefits of this reduction in the policy rate to the users of its refinance schemes, SBP has now decided to align the end user markup rates on two of its refinance schemes for promoting investment in the country. Specifically, SBP has curtailed the end user markup rates on Temporary Economic Refinance Facility (TERF) to 5% from the existing 7% and on Long Term Financing Facility (LTFF) for non-textile sector to 5% from 6%. Details:
http://www.sbp.org.pk/smefd/circulars/2020/CL19.htm
http://www.sbp.org.pk/smefd/circulars/2020/CL20.htm
Temporary Economic Refinance Facility (TERF): SBP introduced this facility to provide stimulus to the economy by supporting new investment and balancing, modernization and restructuring (BMR) of the existing projects. To further improve the incentive under the scheme, SBP has lowered the end user mark-up rates from existing 7% to 5%. SBP will now be providing refinance to banks at 1% with banks’ maximum margin of 4%. Further, SBP has also allowed the TERF facility in cases where LCs/Inland LCs were opened prior, but retiring after the introduction of the scheme on March 17, 220. These measures, in the backdrop of earlier policy action of allowing BMR under TERF, are expected to further support the economic activity, new long term investment and employment generation. Under this scheme, up till 2nd July 2020, Rs10.5 billion have been approved by banks for 21 projects.
Long Term Financing Facility (LTFF): LTFF is one of the oldest refinance schemes of SBP under which financing is available for export-oriented projects for purchase of imported and locally manufactured new plant and machinery. In March, 2020 SBP opened the LTFF to all sectors across the board. Earlier the end user markup rate under this scheme were 5% for textile sector and 6% for non-textile sectors. State Bank has now reduced its refinance rate for non-textile sector by 1% and therefore the end user rate for all sectors across the board will be 5%.
It is expected that the above measures will help facilitate long term investment in both domestic and export market.

Bookmark the permalink.

Comments are closed.

  • RSS Newsnreleases

    • C. Hunter becomes CEO of HomeTrust Bank, President of HomeTrust Bancshares 27-Jul-2021
      ASHEVILLE: HomeTrust Bancshares Inc., the holding company of HomeTrust Bank, announced that C. Hunter Westbrook will assume the positions of... Continue reading The post C. Hunter becomes CEO of HomeTrust Bank, President of HomeTrust Bancshares appeared first on NewsnReleases.
    • Blackwood Partners and Nicola Wealth acquire another industrial land 27-Jul-2021
      TORONTO, ONTARIO: Blackwood Partners and Nicola Wealth Real Estate (NWRE) acquired a 34-acre industrial development site located in Grimsby, southwest... Continue reading The post Blackwood Partners and Nicola Wealth acquire another industrial land appeared first on NewsnReleases.
    • Neles to acquire Flowrox for Eur 40.9 million 27-Jul-2021
      HELSINKI, FINLAND: Neles has signed an asset purchase agreement to acquire the valve and pump businesses of the Finland-based technology... Continue reading The post Neles to acquire Flowrox for Eur 40.9 million appeared first on NewsnReleases.
    • Beatrice Mary Nicholas appointed non-executive director at Cohort Plc 27-Jul-2021
      LONDON, UK: Cohort Plc, the independent technology group, announced the appointment of Beatrice Mary Nicholas as a non-executive director, with... Continue reading The post Beatrice Mary Nicholas appointed non-executive director at Cohort Plc appeared first on NewsnReleases.
    • Stephen Birrell joins Live Company Group board 27-Jul-2021
      LONDON, UK: Live Company Group plc has appointed Stephen Birrell as an independent Non-Executive Director with immediate effect, a news... Continue reading The post Stephen Birrell joins Live Company Group board appeared first on NewsnReleases.