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KARACHI: The State Bank of Pakistan (SBP) has enhanced the financing limit for setting up a new hospital under its Refinance Facility for Combating COVID-19 (RFCC) from Rs 500 million to Rs 1 billion.

In March this year, the SBP announced a "Refinance Facility for Combating COVID-19 (RFCC)"and its Shariah compliant version (Islamic Refinance Facility for Combating COVID 19 (IRFCC) to financially support the hospitals and medical centers in combating the spread of COVID-19. The State Bank introduced a time-bound emergency support for hospitals and medical centres by providing refinance facility to develop capacity for treatment of infected patients of COVID 19.

Under the scheme, long-term financing facility is being provided to hospitals for purchase of new imported and locally-manufactured medical equipment to be used for combating COVID-19.

Initially, the maximum financing limit under the RFCC/IRFCC was Rs 200 million per hospital or medical centre. On 30 April 2020, SBP increased the financing limit of a single hospital/medical center under its refinance facility from Rs 200 million to Rs 500 million to strengthen health sector in fight against COVID-19.

Now, in order to meet financing needs for setting up new hospitals, the SBP has 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 uptill June 30, 2021.

According to circular issued Tuesday, the SBP has also advised banks that the applications approved by Participating Financial Institutions uptill September 30, 2020 will be eligible for refinance under the RFCC/ IRFCC scheme. Hence, Letter of Credits (LCs) established under these approved applications will be eligible for refinance even if these LCs are established after September 30, 2020.

The SBP has asked Participating Financial Institutions that details of all these approved cases should be reported in weekly report of RFCC and IRFCC by 1st October, 2020.

As per fresh statistics, as on Sep 24, 2020, some 47 hospitals applied for the financing of Rs 9.76 billion under the RFCC and IRFCC. Out of received application, participating financial institutions have provided Rs 6.343 billion financing facility to some 34 hospitals.

The SBP launched this long term finance facility for purchase of new/existing imported and locally manufactured medical equipment to be used for combating COVID-19. All hospitals and medical centers registered with respective provincial/federal agencies/commissions engaged in controlling and eradication of COVID-19 were eligible under the facility.

Financing under this facility is being made available by the SBP at zero (0) percent to banks that can charge a maximum rate of 3 percent per annum to hospitals/medical centers for 5 years for the purchase of equipment to detect, contain, and treat coronavirus.

Under the refinancing scheme health sector is allowed to get financing against existing equipment and purchase of refurbished equipment for creating special facility/isolation ward to deal with COVID-19. Moreover, maximum coverage of 60 percent of civil works for setting up separate /isolation facility was also enhanced to 100 percent in April.

Copyright Business Recorder, 2020