State Bank of Paksitan COVID-19

Graphs

Timeline

Monetary Easing Cycle

Scheme in Brief

Loan Extension and Restructuring Package of State Bank of Pakistan (Debt Relief Scheme) was announced to facilitate the borrowers in restructuring and deferment of their loans. The Debt Relief Scheme aimed to preserve the solvency of the borrowers and enable them to combat the temporary economic disruptions.

Features

Deferment

Loan principal amount only can be deferred for up to twelve months and borrower continues to service mark-up amount as per agreed terms & conditions.

Credit history of borrower will not be affected adversely.

Bank will convey their decision to borrower in 15 days of application.

Increase in number of days past due after which loan is considered as non-performing, to facilitate processing of applications.

Eligibility Criteria

Borrower makes a written request before expiry date of scheme.

Loan is performing as on 31-Dec-2019.

The borrower continues to service mark-up amount as per agreed terms & conditions.

Validity
30-Sep-2020

Restructuring

Loan principal amount can be deferred for more than twelve months and repayment terms of mark-up amount can also be relaxed.

Credit history of borrower will not be affected adversely.

Increase in number of days past due after which loan is considered as non-performing, to facilitate processing of applications.

Eligibility Criteria

Borrower makes a written request before expiry date of scheme.

Loan is performing as on 31-Dec-2019.

Restructuring is completed within the prescribed number of days.

Validity
31-Mar-2021

Performance

The response to the debt relief scheme has been overwhelmingly positive and all categories of customers including corporate / commercial and retail borrowers benefited from it.

(Amount of principal deferred and loans restructured in PKR Billions)

Loan Category	No. of Applications Received	Particulars of Approved Applications
Loan Category	No. of Applications Received	No. of Applications Accepted	% of Accepted Applications	Amount Approved
Corporate / Commercial	3,172	2,878	90.73	717.853
SME	10,835	10,406	96.04	27.632
Consumer Finance	100,519	65,161	64.82	22.359
Housing Finance	2,959	2,140	72.32	10.082
Agriculture Financing	29,954	27,216	90.86	11.574
Microfinancing	1,736,113	1,717,665	98.94%	121.280
Total	1,883,552	1,825,466	96.92%	910.781

As of April 16, 2021

Out of 1.883 million applications received, banks, DFIs and MFBs have approved 1.825 million applications (96.92 %) up to April 02, 2021. Since the launch of the scheme, the individual borrowers, especially the customers of microfinance banks, have been the major beneficiaries of the scheme. The restructured and deferred loans include 1.717 million approved applications of customers of microfinance banks involving an amount of Rs 121 billion, which approximately constitutes 50 percent of total net-loan portfolio of MFBs.

Whereas, Rs 717 billion out of total restructured and deferred amount of Rs 910 billion relates to corporate and commercial borrowers; as corporate loan portfolio of the banking industry constitutes 69.9 percent of total loan portfolio of banks, DFIs and MFBs.

During the last fortnight, the performance from the FIs has remained static as the deadline for restructuring scheme has elapsed, which was March 31, 2021.

(As of April 16, 2021 )

Timeline

August 10, 2020

SBP expands relief measures for microfinance borrowers and enhances loan limits for MFBs

On August 10, 2020, SBP expanded the scope of relief package for MFBs and their borrowers with following three additional measures to better enable them deal with the adverse implications of the ongoing COVID-19 pandemic:

i. The relief measures that were earlier available to borrowers who were regular on February 15, 2020, were also allowed to all such borrowers who were regular on December 31, 2019. This enabled additional borrowers, who were previously not eligible, to avail the relief under the scheme,

ii. The time based classification and provisioning requirements extended by 2-months; and

iii. Consent of borrower through recorded lines made permissible to facilitate the MFBs and their customers avail the relief under the scheme.

July 07, 2020

Availability of deferment of principal amount of loans facility extended till September, 2020

On July 07, 2020, the validity of Deferment of Principal amount facility was extended until September 30, 2020. This facility, however, be available for Small & Medium Enterprise Financing, Consumer Financing, Housing Finance, Agriculture Finance and Micro financing only. The facility was not extended to corporates and commercial borrowers since a significant amount of their loans had already been deferred.

April 23, 2020

SBP issues Guidelines for IBIs for Implementation of Regulatory Relief to Dampen the Effects of COVID-19

With a view to facilitate the customers of Islamic Banking institution (IBIs) and smooth implementation of relaxation provided in respective prudential regulations related to deferment of principal or rescheduling/restructuring of financing facilities, State Bank of Pakistan on April 23, 2020 has issued Guidelines for IBIs. These guidelines provide major mode wise general principles to enable IBIs to effectively deal with the requests of deferment of principal and/or rescheduling/restructuring of financing facilities.

March 26, 2020

Loan extension and restructuring scheme launched

On March 26, 2020, SBP announced the loan extension and restructuring scheme with an aim to preserve the solvency of the borrowers during temporary economic challenges. Under the scheme, two options were made available to the borrowers i.e. (1) to get the loans deferred for up to twelve months or (2) to get their loans restructured.

Deferment
To avail this facility, borrower was required to submit a written request to the bank before June 30, 2020. Banks and DFIs were advised to defer the payment of principal loan amount by up to twelve months subject to condition that borrower will continue to service the mark-up amount as per agreed terms and conditions.

Restructuring
The borrowers whose financial condition require either deferment of principal loan amount for more than twelve months or the change in repayment terms of mark-up amount; SBP relaxed the regulatory criteria for restructuring of such loans. Moreover, the loans that are restructured within 180 days (the requirement may vary depending on category of loan) from the due date of repayment will not be treated as defaults. Banks would also not be required to suspend the unrealized mark-up against such loans.

Circulars/FAQs

Circulars

August 10, 2020

http://www.sbp.org.pk/acd/2020/C2.htm

http://www.sbp.org.pk/acd/2020/CL7.htm

July 07, 2020

http://www.sbp.org.pk/acd/2020/CL5.htm

http://www.sbp.org.pk/acd/2020/CL4.htm

http://www.sbp.org.pk/smefd/circulars/2020/CL18.htm

http://www.sbp.org.pk/smefd/circulars/2020/CL17.htm

http://www.sbp.org.pk/bprd/2020/CL29.htm

http://www.sbp.org.pk/bprd/2020/CL28.htm