Deferrment of loans' repayment: Modarba comapnies allowed three-month extension

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has allowed three months extension for all lending Modarbas companies for accepting customers' request to defer repayment of principal loan amount.

The SECP has amended circular 15 of 2020 (facilitation to Modarabas) through a circular 28 of 2020 for relaxation to lending Modarabas here on Thursday. Accordingly, a lending Modarba may, upon a written request of a customer received before Sep 30, defer repayment of principal loan facility amount by one year, provided that the customer would continue service the markup amount as per agreed terms and conditions. All other provisions of the circular number 15 of SECP would remain the same.

The financial facilities of such customers who are unable to pay the profit amount or need deferment exceeding one year, may be rescheduled or restructured upon their request. If the rescheduling or restructuring is done within 180 days of loan/facility being overdue and such facilities would continue to be treated as regular and reported in the ECIB accordingly, SECP stated.

The SECP has already allowed all lending Non-Bank Finance Companies (NBFCs) including Non-Bank Microfinance Companies (NBMFCs) to defer repayment of principal loans by their borrowers for one year, under the present circumstances owing to the outbreak of Covid-19 (coronavirus) pandemic. The deferment facility of repayment of principal loans or rescheduling/restructuring would be available to the borrowers of the NBFCs and the NBMFCs.

Copyright Business Recorder, 2020