Circulars/Notifications / Infrastructure, Housing & SME Finance Department  

 IH&SMEFD Circular No. 06 of 2020
April 10, 2020

The Presidents/ Chief Executives,
All Banks / DFIs


Dear Sir/Madam,

Refinance Scheme for Payment of Wages & Salaries to the
Workers and Employees of Business Concerns

               To combat the impact of COVID-19 and to help the businesses in payment of wages and salaries to their workers and employees and thereby support continued employment in this challenging environment, State Bank of Pakistan (SBP) has introduced a temporary refinance scheme for payment of wages and salaries to the workers and employees of the business concerns. This Scheme is expected to ease cash flow constraints of the employers and thereby avoid layoffs. Salient features of the scheme are as follows:


Scope & Eligibility Criteria: The Scheme aims to finance wages and salaries of permanent, contractual, daily wagers as well as outsourced employees of existing as well as new borrowers of banks and DFIs for the months from April 2020 to June 2020. Government Entities, Public Sector Enterprises, Autonomous Bodies and Financial Institutions will not be eligible under this Scheme:


Maximum Financing Limit: Maximum financing limit of a borrower under this scheme will be determined in the following manner:

Category Wage Bill for 3 months Loan Limit Maximum Loan Limit
(1) (2) (3) (4)
A Less than or equal to Rs. 200 million 100% of actual 3 months wage bill Rs. 200 million
B More than Rs. 200 million and less than or equal to Rs. 500 million Rs. 200 million or 75% of 3 months wage bill, whichever is higher Rs. 375 million
C More than Rs. 500 million Rs. 375 million or 50% of actual 3 months wage bill, whichever is higher Rs. 500 million


Tenor of Financing: The repayment of financing under the Scheme will start from January 2021. The repayment will be made in equal 8 quarterly instalments.


End User Rate: Maximum 5% per annum (p.a.) for end users. SBP rate of service charges for banks/DFIs will be 2% p.a. per annum for corporate/commercial borrowers and 1% p.a. for SME borrowers.


Rebate for Tax Filers: SBP will allow additional subsidy of 1% p.a., by reducing its rate of refinance/service charges, for borrowers that are on active taxpayers lists under the Income Tax Ordinance, 2001.


Validity of the Facility: 30th June 2020.

  1. The borrowers availing this Scheme will undertake not to lay off their workers/employees during first three months.

  2. The Scheme will be effective immediately. The banks/DFIs will be allocated appropriate refinance limits under the Scheme by Infrastructure, Housing & SME Finance Department, SBP, Karachi.

  3. Details of the scheme are provided in the attached Annexures.

Annexure-I: Refinance Scheme
Annexure-II: Documents and Details of Refinance Scheme

Yours sincerely,


(Dr. Mian Farooq Haq)


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