New SBP policy on ECIB soon, says Dr Reza Baqir

LAHORE: The State Bank of Pakistan (SBP) Governor Dr. Reza Baqir on Friday said the SBP wanted to increase the dialogue with the business community and was committed to serve the un-served sectors like Small and Medium Enterprises (SMEs) and women entrepreneurs.

He expressed these views during his visit to the Lahore Chamber of Commerce and Industry (LCCI).

LCCI President Mian Tariq Misbah, Senior Vice President Nasir Hameed Khan, Vice President Tahir Manzoor Chaudhry, President SAARC Chamber of Commerce Iftikhar Ali Malik, former Presidents Mian Misbah-ur-Rehman, Deputy Governor SBP Seema Kamil, LCCI Executive Committee Members and other officers of SBP were also present on the occasion.

He said the SBP was giving the due consideration to LCCI demands regarding Electronic Credit Information Bureau (ECIB) and was looking into it positively, adding that policy on ECIB would be announced in few days.

The SBP Governor said the State Bank was focusing on Digital Financial Services (DFS) and was bringing a system where payments would be done in seconds.

He said the Interest rate had been decreased by 6 percent and the exchange rate was now moving in a two way orderly fashion.

Highlighting the steps taken by the SBP, Dr. Reza Baqir said, in recent times to facilitate businesses affected by the COVID-19, the SBP had decreased the interest rate, secondly he said, “We have deferred around Rs. 650 billion principal payments out of which 90 percent beneficiaries were small entrepreneurs (borrowers of microfinance banks)."

He said that to support the businesses in their mark-up payments, Rs. 200 billion loans were restructured. He said under PM Rozgar Finance Scheme, Rs. 232 billion were given for the salaries of employees, adding that, all schemes provided a relief of around more than Rs. 1 trillion.

The Governor SBP said businesses could avail the Temporary Economic Refinance Facility (TERF) till 30th March 2021.

He said that under TERF they could get a long term loan for 10 years on 5 percent interest, adding that businesses could use these loans for Balancing, Modernization and Replacement (BMR).

He said the Commercial Banks had been given the target to increase the housing finance to 5 percent of the loan portfolio by December 2021.

This would help around 20 to 30 allied sectors of housing, he added.

He said the facility of Roshan Digital Account was being provided to overseas Pakistanis through which the account could be opened without going to embassy and the attestation of any document, adding that Pakistanis having assets abroad could also avail this facility.

He said all these achievements were the result of the institutional reforms.

The SBP Governor said Pakistan Credit Guarantee Corporation (PCGC) was being set up through which the banks would get 60 percent risk cover for giving loan to SMEs, adding that under markup subsidy scheme, small houses would be financed for 3 to 5 percent.

On the occasion the LCCI President Mian Tariq Misbah said there were a large number of businesses which were not able to clear their bank liabilities in time due to the current liquidity crisis and hence their names were included in Electronic Credit Information Bureau (ECIB), adding, this made it hard for them to secure credit from any financial institution.

"We would request the State Bank to relax this condition till June 2021," he added.

He said It had been observed that even after the customers fully settled their overdue payments amicably with the banks, their names were still reported in the ECIB under write-offs.

"This matter needs your consideration," he said and added the customers of all banks should also be given access to check their own status in ECIB database and banks should intimate customers before reporting any overdue in ECIB and give them reasonable time for reconciliation and settlement of overdue liabilities.

He said the SBP’s recent initiative of allowing the businesses to apply for deferring the payment of principal amount on loans for one year should be extended till June 2021.

The State Bank should facilitate the businesses in all the major cities of the country by allowing them to directly pay the customs duty on imports at certain designated branches of National Bank in their respective cities, he added.