Fiscal relief package: SBP announces release of third instalment of mark-up rate subsidy

The State Bank of Pakistan (SBP) on Monday announced the release of third instalment of mark-up rate subsidy on business loans for the period from January 1 to June 30, 2011 under the Prime Minister's Fiscal Relief Package to rehabilitate the economic life in Khyber Pakhtunkhwa, Federally Administrated Tribal Area (FATA) and Provincially Administrated Tribal Area (PATA).
"Duly completed claims for reimbursement of mark-up rate subsidy for the period from January 01 to June 30, 2011 may be submitted separately for Textile Sector and other eligible sector to SBP-BSC (Bank), Peshawar up to August 31, 2011", SBP circular issued on Monday said. The SBP has informed all banks/development finance institutions (DFIs)/microfinance banks (MFBs) that the rate of mark-up differential for the third instalment, for six months ending on June 30, 2011, has been worked out at 6.18 percent.
Accordingly, banks and DFIs may calculate the amount of mark-up rate differential on outstanding business loans of above areas, on the basis of above rates and keeping in view the terms and conditions contained in above Scheme. However, MFBs may calculate mark-up rate differential to the extent of 22.5 percent pa, ie differential between 7.5 percent pa and weighted average lending rates of MFBs ie 30 percent pa or actual rate whichever is lower, as communicated in September, 2010, the circular added.