SBP announces refinance facility for agriculture
SBP will introduce credit guarantee schemes for encouraging banks to extend fresh loans in flood-hit regions.
KARACHI:
The State Bank of Pakistan (SBP) has decided to offer refinancing facility at discounted rates to the agriculture sector and small businesses in flood-hit areas and introduce credit guarantee schemes for encouraging banks to extend fresh loans in these regions.
This was announced by the Acting Governor State Bank of Pakistan, Yaseen Anwar, while presiding over a meeting of presidents and chief executive officers of all banks at the SBP on Friday.
He disclosed that the SBP has decided to grant relaxation in provisioning requirements for loans that have been stuck because of the tragedy and introduce appropriate credit guarantee schemes to share losses with banks to encourage them to extend fresh loans in the flood-affected areas. He said these initiatives are ready as modalities are being finalised in consultation with all stakeholders.
He underscored the need for providing financing facilities to the farmers and small businesses to help them in restoring their businesses. He informed the meeting that the volume of non-performing loans (NPLs) in these areas will increase substantially. According to initial estimates, total NPLs will be over Rs48 billion, he added.
Anwar said the SBP is setting up four committees of banks for revival of economic activities in the flood-affected areas. The committees will be on SME Finance, Agricultural Finance, Microfinance and General Relief Activities.
While the relief committee of the Pakistan Banks Association (PBA) will coordinate with banks to channelise relief measures to the affected people, the other three committees will put forward their recommendations for the immediate relief and smooth flow of credit to the people, he added.
Anwar said the SBP will be convener of the meetings of these committees. SME Finance Committee will include senior-level members from Habib Bank Limited (HBL), National Bank of Pakistan (NBP), Faysal Bank, Standard Chartered Bank, Bank Alfalah, Meezan Bank and NIB Bank.
Agriculture Finance Committee will comprise representatives from NBP, HBL, Faysal Bank, United Bank Limited (UBL), Askari Bank and Zarai Taraqiati Bank Limited (ZTBL).
The Microfinance Committee will include representatives from HBL, NBP, Khushhali Bank, First Microfinance Bank, Tameer Microfinance Bank and Kashf Microfinance Bank.
First meeting of these committees will be held on August 24. The SBP acting governor assured the banks that the central bank will provide all necessary assistance to them in facilitating the flow of credit to the flood-affected people.
He said the catastrophe is of vast magnitude and “we should rise to the occasion and help the affected people.” “We will do whatever we can within our regulatory domain to make available liquidity to the banking sector without jeopardising the stability of the financial system.”
The representatives of the banks informed the meeting about the various steps that are being taken by them for the flood-affected people.
Published in The Express Tribune, August 21st, 2010.
The State Bank of Pakistan (SBP) has decided to offer refinancing facility at discounted rates to the agriculture sector and small businesses in flood-hit areas and introduce credit guarantee schemes for encouraging banks to extend fresh loans in these regions.
This was announced by the Acting Governor State Bank of Pakistan, Yaseen Anwar, while presiding over a meeting of presidents and chief executive officers of all banks at the SBP on Friday.
He disclosed that the SBP has decided to grant relaxation in provisioning requirements for loans that have been stuck because of the tragedy and introduce appropriate credit guarantee schemes to share losses with banks to encourage them to extend fresh loans in the flood-affected areas. He said these initiatives are ready as modalities are being finalised in consultation with all stakeholders.
He underscored the need for providing financing facilities to the farmers and small businesses to help them in restoring their businesses. He informed the meeting that the volume of non-performing loans (NPLs) in these areas will increase substantially. According to initial estimates, total NPLs will be over Rs48 billion, he added.
Anwar said the SBP is setting up four committees of banks for revival of economic activities in the flood-affected areas. The committees will be on SME Finance, Agricultural Finance, Microfinance and General Relief Activities.
While the relief committee of the Pakistan Banks Association (PBA) will coordinate with banks to channelise relief measures to the affected people, the other three committees will put forward their recommendations for the immediate relief and smooth flow of credit to the people, he added.
Anwar said the SBP will be convener of the meetings of these committees. SME Finance Committee will include senior-level members from Habib Bank Limited (HBL), National Bank of Pakistan (NBP), Faysal Bank, Standard Chartered Bank, Bank Alfalah, Meezan Bank and NIB Bank.
Agriculture Finance Committee will comprise representatives from NBP, HBL, Faysal Bank, United Bank Limited (UBL), Askari Bank and Zarai Taraqiati Bank Limited (ZTBL).
The Microfinance Committee will include representatives from HBL, NBP, Khushhali Bank, First Microfinance Bank, Tameer Microfinance Bank and Kashf Microfinance Bank.
First meeting of these committees will be held on August 24. The SBP acting governor assured the banks that the central bank will provide all necessary assistance to them in facilitating the flow of credit to the flood-affected people.
He said the catastrophe is of vast magnitude and “we should rise to the occasion and help the affected people.” “We will do whatever we can within our regulatory domain to make available liquidity to the banking sector without jeopardising the stability of the financial system.”
The representatives of the banks informed the meeting about the various steps that are being taken by them for the flood-affected people.
Published in The Express Tribune, August 21st, 2010.