Mark-up rate subsidy: State Bank to issue second installment

KARACHI: The State Bank of Pakistan (SBP) has advised banks, development finance institutions (DFIs) and microfinance banks (MFBs) to submit claims for the second installment of mark-up rate subsidy with respect to the fiscal relief package for the beneficiaries of eligible sectors other than textiles in Khyber-Pakhtunkhwa, Federally and Provincially Administered Tribal Areas.

According to a circular issued by the SBP on Friday, the ministry of finance has asked for the release of the second installment of the subsidy for the period from July to December 2010 to the beneficiaries of eligible sectors. The SBP had already advised banks and DFIs to submit claims for the release of second installment for the beneficiaries of textile sector through a circular on January 15.

According to the latest circular, under the modus operandi of the scheme the rate of mark-up differential for the second installment has been worked out at 5.32 per cent. Banks and DFIs have been advised to submit claims with the SBP-BSC (Bank) Peshawar for reimbursement by February 28.

However, the MFBs may claim the mark-up rate differential to the extent of 22.5 per cent per annum - the difference between 7.5 per cent per annum and weighted average lending rate of MFBs ie 30 per cent per annum or actual rate whichever is lower, the circular added.

Published in The Express Tribune, January 29^th, 2011.