Tag: COVID-19

SBP doubles loan size for setting up hospital to combat COVID

KARACHI: State Bank of Pakistan (SBP) has enhanced loan size to Rs 1 billion from Rs500 million for setting up new hospital to combat COVID-19.

The central bank in a notification said that in order to meet financing needs for setting up new hospitals allowed through a notification issued on July 2020, it has been decided to enhance loan size from Rs 500 million to Rs 1 billion per hospital.

The scheme for setting up of new hospitals will remain valid up till June 30, 2021, as mentioned in Circular Letter No. 16 of 2020.

The SBP further invited attention to to IH&SMEFD Circular No. 03 and 04 of 2020 read with IH&SMEFD Circular Letter No. 08 and 16 of 2020 and said that the applications approved by Participating Financial Institutions up till September 30, 2020 will be eligible for refinance under the scheme.

Hence, LCs established under these approved applications will be eligible for refinance even if these LCs are established after September 30, 2020. Details of all these approved cases should be reported in weekly report of RFCC/IRFCC by 1st October, 2020.

September 29, 2020
Pakistan mulls opening tourism spots by mid-August

ISLAMABAD: Pakistan is considering to open tourist spots across the country by mid of August provided that the COVID-19 situation was remained under control, said Special Assistant to Prime Minister of Pakistan Syed Zulfiqar Abbas Bukhari.

He, however, categorically announced that all tourist spots would be remain closed during Eid ul Azha holidays. He said decision to this effect has been made to prevent people from coronavirus as it was experienced during Eid ul Fitar.

He stated this while talking to a delegation of Hotels, Guest Houses and Tourism Association at Islamabad on Friday July 17, 2020.

He said that year 2021 will be considered as year of Tourism and all avenues of recreation would opened by reviewing COVID-19 favorable situation after Eid ul Azha.

Central President Gulariz Khattak, Chairman Tahir Aurakzai, General Secretary Dr. Usman Qazi, Information secretary Asif Khan and Secretary Training Sulman Awan apprised about the issues and difficulties being faced by the Association Members.

Zulfiqar Bukhari said that in accordance with the vision of Prime Minister of Pakistan Imran Khan, Tourism would be promoted throughout the country and keeping on board all Provinces effective measures were being adopted to extend maximum facilitations to all stakeholders and as well as tourists.

Responding the recommendations of delegation members, Zulfi Bukhari assured proper representation of Hotels, Guest Houses and Tourism Association in National Tourism Coordination Board and also assured for taking up the matter of issuing interest free loans to those whose business had been badly affected due to COVID-19.

He also assured for renewing registration of guest houses as soon as possible to mitigate the suffering of guest houses owners. He said COVID-19 SOP’s and guidelines has been finalized in consultation with Provinces and only reply of Sindh Province is awaited and after completion of process necessary action would be taken for opening hotels and guest houses.

Matters pertaining to promotion of tourism, regularization and streamlining the procedures also came under discussion.

July 19, 2020
SBP extends deferment of principal amount facility till September 30

KARACHI: State Bank of Pakistan (SBP) has decided to extend the deferment of principal amount facility up till September 30, 2020, a statement said on Tuesday.

The central bank said that considering the fact that COVID-19 pandemic is continuing to stress the cash flow of small and medium sized businesses and households, SBP has decided to extend the Deferment of Principal Amount facility up till September 30, 2020.

This facility will however be available for Small & Medium Enterprise Financing, Consumer Financing, Housing Finance, Agriculture Finance and Micro financing only.

The facility is not being extended to corporates and commercial borrowers since a significant amount of their loans and advances has already been deferred.

It is expected that more businesses and households, who were not able to avail the facility, will benefit from this extension.

On March 26, 2020, amid growing concerns about the potential economic impact of the COVID–19 pandemic, SBP with the collaboration of Pakistan Banks Association (PBA) announced a comprehensive set of measures to help businesses and households to manage their finances.

Among these, a key measure was the deferment of principal amount of loans and advances by banks and DFIs.

Under this facility, businesses and households could request for the deferment of their loans and advances for a period of one year, albeit continuing to service the mark-up amount.

The measure also ensured that the deferment of principal will not affect borrower’s credit history and such facilities will not be reported as restructured/rescheduled in the credit bureau’s data.

This measure proved extremely helpful for borrowers and is evident from the fact that up till 3rd July 2020, banks deferred Rs593 billion of principal amount of loans of over 359 thousand borrowers.

A very large number of borrowers— 95 percent of total beneficiaries of this scheme, as of July 3, 2020 have been small borrowers including SMEs, consumer finance, and microfinance.

July 7, 2020
SBP expands refinance facility for health sector to combat COVID-19

KARACHI: The State Bank of Pakistan (SBP) on Monday expand the refinance facility at lower rates for health sector in order to combat COVID-19.

On March 17, 2020, SBP introduced a refinance scheme, titled Refinance Facility to Combat Covid-19 (RFCC), to support the hospitals and health sector for providing services to directly fight against Covid-19.

Under this scheme, banks provide concessional loans at a maximum end-user rate of 3 percent for 5 years for hospitals and medical centers to purchase medical equipment and set up isolation wards for developing capacity and supporting the health sector in fight against COVID-19.

Since its inception up till 2nd July 2020, Rs 6.4 billion of concessional credit have been approved for hospitals and other eligible facilities to fight COVID-19.

Keeping in view the encouraging response and the potential to help developing the health facilities in the country, SBP has now expanded the scope of this refinance facility further.

The scheme now allows manufacturers of protective gears and equipment, including items such as masks, dresses, testing kits, hospital beds, ventilators etc. to avail financing under RFCC.

Moreover, to cope with the rising needs of the health facilities in general in the country, SBP has allowed hospitals serving patients even other than COVID-19 to avail this facility.

Refinance facility will be available for setting up or expansion of the existing hospitals fulfilling minimum specified standards.

For setting up new hospitals under this scheme, payments will be released by the banks on completing relevant milestones.

RFCC is highly subsidized facility where SBP provides refinance to banks at 0% whereas banks can keep a maximum margin of 3%. Some of the banks treating this as part of their CSR are keeping margins very low.

July 6, 2020
Meezan Bank’s Shariah Board approves guidelines for COVID related refinance schemes

KARACHI: Meezan Bank’s Shariah Supervisory Board (SSB) has approved guidelines for COVID-19 related refinance schemes intended to provide relief to businesses and individuals during these challenging times.

In the 47th meeting of Meezan Bank’s Shariah Supervisory Board (SSB) was recently held as an online event, with the goal of preventing contagion and staying consistent with the recommendations of global and local health authorities and the Government.

This was the first Shariah Supervisory Board meeting conducted completely online where members from across different countries participated via video conferencing.

The meeting was chaired by Justice (Retd.) Mufti Muhammad Taqi Usmani and was attended by Dr. Muhammad Imran Ashraf Usmani, Sheikh Esam Mohamed Ishaq (Bahrain) along with other members of the SSB.

Meezan Bank’s Founding President and CEO – Irfan Siddiqui, Deputy CEO – Ariful Islam and senior management of the Bank were also present at the meeting.

In view of the current situation and the outlook for the coming months, the Bank’s SSB has approved guidelines for COVID-19 related re-finance schemes intended to provide relief to businesses and individuals during these challenging times.

The Board reviewed several key issues including policies adopted by the Bank as well as the corresponding contingency plans ensuring that the Bank continues to serve its customers normally despite the challenges faced due to COVID-19.

Products and structures for providing relief to customers were also discussed in detail after which the SSB approved a comprehensive set of guidelines to ensure that SMEs get adequate support to mitigate the impact of the pandemic on their activities.

The SSB also approved Smart Remittance Account that will enable Overseas Pakistanis to apply for bank accounts online either in PKR or USD currency from anywhere outside Pakistan.

This account will permit Overseas Pakistanis to remit money either in PKR or USD and to invest in Shariah-compliant alternative of “Overseas Pakistanis Saving Scheme” announced by Government of Pakistan (GoP).

Furthermore, the structure for the re-opening of GoP Ijarah Sukuk was also approved by the Board, making it the first time that a re-opening mechanism will be introduced in any Sukuk issued in Pakistan. The re-opening of Sukuk is expected to bring depth in the Pakistani Sukuk market.

The SSB appreciated the Bank’s ‘Work from Home’ policy amid the COVID-19 crisis; which has been adopted to protect the wellbeing of its employees, customers and stakeholders and expressed its overall satisfaction on the Shariah compliance environment and operations of the Bank.

July 3, 2020
Pakistan to face greater challenges in next fiscal due to COVID

ISLAMABAD: Pakistan is likely to face greater challenges in the next fiscal year starting July 2020 due to COVID-19, said Economic Survey 2019/2020 released on Thursday.

“After recording its first contractionary year due to the COVID crisis since 1952, Pakistan is likely to face greater challenges in the 2020/2021 starting July 2020,” according to the survey.

Under normal circumstances, after recording over 3 percent growth, Pakistan could have been reaping the benefits of macroeconomic stability achieved over the last year and would have embarked on a higher growth trajectory of over 4 percent.

However, the pervasive and lasting effects of COVID-19 pose serious challenges to the economy which remains susceptible to its aftermath, despite efforts towards the outbreak’s curtailment.

With an expected 2 percent growth for next year which is even lower than the population growth rate, challenges such as unemployment and poverty are expected to persist and amplify.

A second round of the outbreak could further threaten macroeconomic stability and socioeconomic outcomes.

Businesses will face liquidity issues, and many more may experience insolvency. They will require different kinds of support, for instance bailouts and provision of cheap funding, among others.

Global trade will further dampen thereby constricting exports and remittances inflow, while domestic fiscal adjustment will become even more challenging. Higher debt accumulation will be problematic, financing for development projects may become scarce, revenues might be difficult to increase while expenditure demand may be immense.

Synthesizing all this in an intricate policy mix has to ultimately be in place to smoothen this transition from crisis to stabilization.

June 12, 2020
Budget 2020/2021 to focus on mitigating COVID-19 impact
KARACHI: The government may focus supportive measures in the upcoming budget 2020/2021 in order to reduce the impact COVID-19, analysts said on Tuesday.

Analysts at Arif Habib Limited highlighted the blueprint of the FY21 Budget whereby the key objective of the government is the revival and stabilization of the economy after being pinned down from the ongoing COVID-19 pandemic, via relief and supportive measures for the masses as well as the business community whilst constraining fiscal imbalances and meeting IMF’s revenue collection target.

The government is scheduled to present budget 2020/2021 on June 12, 2020.

They summarized some key expected measures below.
1. Counter Coronavirus and ensure social security
a. Allocation of PKR 1.0trn to fight the ongoing COVID-19 contagion with likely allocation to the following:

I. Daily wagers cash allocation,

II. Higher allocation to the Ehsaas program (for vulnerable families),

III. Subsidized electricity for lifeline consumers,

IV. Enhanced allocation to Utility Stores Corporation (USC),

V. Higher allocation for health and food supplies,

VI. Allocation to the National Disaster Management Authority (NDMA), and

VII. Lowering down taxes on basic essential goods.

b. SBP has already introduced several measures to contain the economic fallout post Corona pandemic such as:

1) 525bps cut in interest rate,

2) announcement of a relief package for households, industries and SMEs,

3) Refinancing scheme to support employment and avert layoffs,

4) Relaxation in credit requirement for exports and imports, and

5) Facilitation of new investments via subsidized interest rates for BMR activities.

c. Higher allocation of social expenditure under the federal PSDP.
1. Revive economic growth, increase PSDP allocation along with incentives for industries
The government has set GDP target for FY21 at 2.3 percent (FY20 estimated at -0.38 percent primarily due to the coronavirus pandemic)

a. Allocation of PKR 630 billion under the Federal PSDP along with an additional PKR 200 billion under Public Private Partnership Authority (PPPA),

b. Reduction of custom and excise duty by 3 percent on imports of machinery for agriculture and power sector,

c. Removal of additional custom duty on different products to support local production and revive demand, and

d. Removal of import duty on plant and machinery. Cascading duty structure on import of raw materials, intermediate goods and finished goods.

Mobilize revenue measures to achieve the additional collection target for next year

Tall revenue target of the FBR at PKR 5.1 trillion with additional requirement amounting to Rs 575 billion (discussed ahead) could be generated by means of:

a. Amendment in income tax treatment of bad debts, which could generate Rs 100 billion in revenue from the banking sector,

b. Imposition of luxury tax on luxury houses, farmhouses, mansions and bungalows,

c. Imposition of import duty on 60 luxury imported items including cars, ceramics and others,

d. Higher petroleum development levy during FY21, and

e. Administrative and enforcement actions undertaken by FBR.
1. Certain expenditures (ex-social spending) to remain uncompromised
The government has set expenditure target for FY21 at Rs 10.4trn

a. Defence expenditure likely to go up to Rs 1.4 trillion,

b. Government is expected to allocate Rs 2.7 trillion for debt servicing in FY21,

c. Federal PSDP allocation will be targeted at Rs 630 billion.
1. Scope of documentation drive to be eased and relaxation expected to revive consumer spending
a. Increase limit of providing CNIC conditions from Rs 50,000 to Rs 100,000,

b. Withholding tax on remittances to be abolished,

c. Reduction of 3 percent in further sales tax on supplies to undocumented individuals, and

d. New sectors to be added to the tax net.
June 9, 2020
Hot, humid weather drops COVID-19 transmission rate: Pakistan Met

ISLAMABAD: Pakistan Meteorological Department (PMD) has identified that COVID-19 transmission rate declined due to rise in temperature and humidity.

The PMD on Saturday told the National Command and Operation Centre (NCOC) that its study had found a decline in COVID-19 transmission rate related to rise in temperature and humidity.

The PMD official briefed the NCOC meeting headed by Minister for Planning, Development and Special Initiatives Asad Umar through video link about the findings of its research conducted in collaboration with the Ministry of Health Services, Regulations and Coordination.

He added that a deep study of the pandemic outbreak pattern showed that the coronavirus spread mostly occurred in the mid latitude which had cold and dry weather.

No single case was reported in the tropical belt during the first three weeks of the contagion rise.

“Increase in temperature from 3-5 degrees mainly beyond 30 degree and mean humidity over 50 degree would slow down the virus transmission,” he noted.

The Forum was also apprised about the testing regime adopted at the airports to contain the epidemic spread.

Special Assistant to the Prime Minister on National Security Dr Moeed Yusuf said that there was 90 percent local transmission of COVID-19 at the moment and only ten percent were foreign induced.

He said there was no testing done of the air travelers at the airports in many of the countries rather they were putting the masses under self-quarantine.

The forum made detailed discussion on the issue with the provinces where the provincial chief secretaries agreed to the idea of abolishing testing on arrival of the passengers and agreed for a strict and proper screening of the passengers arriving at the airports.

The forum including provincial chief secretaries condoled the demise of the passengers of PIA aircraft crashed in Karachi.

May 24, 2020
World Bank approves $500 million to help Pakistan’s COVID-19 emergency response

WASHINGTON: The World Bank’s Board of Executive Directors approved today a $500 million program to help Pakistan improve access to quality healthcare and education, support economic opportunities for women, and strengthen social safety nets as the country braces to limit the impact of the COVID-19 pandemic.

The Securing Human Investments to Foster Transformation (SHIFT) program will support policy reforms to help Pakistan’s COVID-19 emergency response and protect human capital investments, a statement said.

It will support greater coordination between provinces and federal authorities to immunize millions of children and reduce their risks of contracting polio and other diseases.

SHIFT also improves targeted safety net programs that will benefit 12 million people impacted by the COVID-19 crisis, both at the federal and provincial levels.

“The global COVID-19 pandemic is impacting day-to-day life in Pakistan – not solely from economic disruptions but also additional stress on public services that jeopardize human capital accumulation,” said Illango Patchamuthu, World Bank Country Director for Pakistan.

“This program underscores the criticality of universal healthcare and social protection services that are durable to exogenous shocks such as Pakistan is facing now.”

SHIFT supports three policy reforms aimed at building Pakistan’s workforce and improving social safety-net programs, which are:

(i) increase the quality of essential services, especially primary health care and equitable access to basic education, and civil registration and vital statistics,

(ii) recognize women’s economic contributions and support participation in the labor force through appropriate working conditions, and

(iii) improve efficiencies in safety nets for COVID-19 response, and strengthen the effectiveness national and federal safety net programs in the short to medium term.

“Pakistan’s ability to mitigate socio-economic impacts of COVID-19 depends on how quickly and efficiently social safety net programs can reach those most in need,” said Cristina Panasco Santos, Task Team Leader for the program.

“This program supports alignment efforts between Ehsaas, safety nets provincial programs to ensure that the most vulnerable and affected populations are identified and receive assistance.”

The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response.

May 22, 2020
SBP allows circulation of quarantined infected banknotes

KARACHI: State Bank of Pakistan (SBP) has advised banks to use the infected banknotes that have completed 14 days quarantine period.

The SBP on Monday issued advisory for banks related to COVID-19 – Uninterrupted Supply of Disinfected Cash at Banks and ATMs.

The SBP previously issued a circular dated March 23, 2020 under which banks were advised to disinfect, seal and quarantine the cash collected from hospitals and clinics, until further orders. The banks were given credit for all such cash so quarantined and kept on behalf of SBP.

In the meanwhile, central banks’ practices on the matter have been reviewed which indicate that quarantine of cash for 14 days is sufficient to disinfect the banknotes, which can then be put back into circulation.

Similarly, the World Health Organization has also advised that the life of the virus on porous surfaces (such as paper banknotes) is lower, compared to other hard surfaces.

In view of the above, banks are allowed to use the quarantined cash, which have completed quarantine period of fourteen (14) days.

Consequently, the credit given to banks on account of quarantined cash would be reversed on the fifteenth (15th) day from each reported date.

However, the facility of same day credit for quarantined cash introduced via FD Circular No. 1/2020 dated March 23, 2020 shall continue with contra debit on 15th day, as stated above.

May 4, 2020