SBP, govt policies begin to reap fruits

Governor Baqir says pandemic opened new avenues in different sectors


Salman Siddiqui January 09, 2021
The SBP governor highlighted several schemes introduced to promote quick recovery of the economy and generate employ-ment for the masses. PHOTO: FILE

KARACHI:

The year 2020 was a difficult one as the Covid-19 pandemic ravaged the economy.

However, the policy initiatives and measures that the government and central bank took to support economic activities in Pakistan have started reaping fruits.

“2020 was a difficult year but the pandemic opened up new avenues of opportunities in different sectors of the economy,” State Bank of Pakistan (SBP) Governor Reza Baqir said while speaking at the Pakistan Banking Awards 2020 organised by the Institute of Bankers Pakistan (IBP) on Friday.

The Covid-19 crisis is far from over but the initiatives that the government and the central bank introduced to support economic activities have begun to show a positive impact and “the balance has tilted from adversities to opportunities now”, he said.

“We will be able to put Covid-19 behind us and reap benefits of concessional financing for setting up new businesses or expansion of existing ones, subsidised financing for housing and construction and digitalisation…all of which have begun to show positive impacts,” he said.

 The central bank is set to unveil the digital instant payment system on Monday. This easy and convenient system would revolutionise the entire payment ecosystem of Pakistan.

The pace of digitalisation of the financial system and the economy grew exponentially during the health crisis in Pakistan.

In addition, mobile and internet banking have grown by 130% and 50%, respectively, he said.

Earlier, the central bank introduced Roshan Digital Account (RDA) through digital banking that enabled overseas Pakistanis to open bank accounts in the country without physical presence at bank branches or embassies in foreign countries and without compromising compliances.

So far, 68,000 overseas Pakistanis have opened their accounts in Pakistan and remitted $275 million to date.

The expatriates are offered investment in lucrative assets within Pakistan through the accounts and they have the option to divest at any time, he said.

He elaborated that so far, 500 businesses had availed concessional financing offered for setting up new businesses and for expansion of existing ones under the title of Temporary Economic Refinance Facility (TERF).

Banks have so far approved loans worth Rs277 billion under TERF, which proved to be a good measure for inviting new investment during the times of crisis. It would help at length to expand the economy this year and beyond.

Besides, the central bank rescheduled loan principal repayments worth Rs657 billion as of Friday, he added.

The scheme helped businesses and people avert defaults. Over 90% of the rescheduling was done at the microfinancing level.

Banks have provided loans worth Rs238 billion to corporates for the salaries of their staff members. Concessional loans amounting to Rs8.4 billion have been provided to hospitals to acquire latest equipment to fight against Covid and other diseases.

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