State Bank spends Rs1.3 trillion during Covid-19 pandemic

SBP disbursed aid under financing packages, for medical facilities

The State Bank of Pakistan (SBP) has provided financial aid of over Rs1.3 trillion under financing packages and for medical facilities to mitigate the impact of lockdown imposed to contain the spread of coronavirus.

The State Bank of Pakistan deputy governor, while addressing a meeting at the Korangi Association of Trade and Industry (KATI), said for loans, financing packages and medical facilities, the SBP had provided Rs1.3 trillion so far.

Cumulatively, the central bank’s support for the economy to combat Covid-19 amounted to 3.8% of gross domestic product (GDP), or Rs1,580 billion, according to a recent report of the SBP.

The State Bank disbursed Rs470 billion or 1.1% of GDP as interest rate benefit, as per the report. It deferred loans worth Rs650 billion, 1.6% of GDP.

The report stated that the central bank rescheduled loans worth Rs184 billion or 0.4% of GDP. It provided Rs207 billion or 0.5% of GDP to prevent layoffs.

The central bank also issued Rs69 billion or 0.2% of GDP to support hospitals. This included new investment for health facilities and BMR (balancing, modernisation and replacement) of the already existing facilities.

“It is our top priority to facilitate small and medium enterprises (SMEs) during the time of turmoil,” the SBP deputy governor said. The central bank official discussed relaxation in policies for exporters and direct coordination between the central bank and business community, according to a statement issued by KATI. They agreed on the formation of a combined committee for small and medium enterprises (SMEs).

The deputy governor highlighted that for easy transfer of remittances and investment opportunities, the Roshan Digital Account and other schemes had been introduced.

Furthermore, industries could also take benefit from the Temporary Economic Refinance Fund (TERF), which was a beneficial incentive for them.

The official urged women entrepreneurs to avail themselves of the opportunities created by the SBP schemes.

“During these tough times, the SBP took timely decisions and provided great relief for exports and industries,” said KATI President Saleemuz Zaman.

He said financial health and improved environment should be the priority of the government and financial institutions.

Speaking on the occasion, KATI Patron-in-Chief SM Muneer said remittances had increased and exports had been doing well. However, he added that the process of outstanding payments of exporters should be reformed and made speedy.

Meanwhile, Korangi Industrial Trading Estate Development and Management Company (KITE) Chairman and CEO Zubair Chhaya said, “While several schemes have been introduced by the central bank for the business community, there is still a need to spread the word to relevant sectors in an effective manner.”

Published in The Express Tribune, October 20^th, 2020.

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