KARACHI: The central bank has expanded corona-related concessional loan facility to cover manufacturers of protective gears and equipment and medical facility with expansion plan under the scheme, it said on Monday.
The State Bank of Pakistan (SBP) said the scheme now allows manufacturers of protective gears and equipment, including items such as masks, dresses, testing kits, hospital beds and ventilators to avail financing under the refinance facility to combat COVID-19 (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,” it said in a statement.
“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 subsidised facility where SBP provides refinance to banks at zero percent whereas banks can keep a maximum margin of 3 percent. Some of the banks treating this as part of their corporate social responsibility are keeping margins very low.
In March, the SBP introduced a refinance scheme, titled RFCC, to support the hospitals and health sector for providing services to directly fight against COVID-19. Under the scheme, banks provide concessional loans at a maximum end-user rate of 3 percent for 5 years for hospitals and medical centres to purchase medical equipment and set up isolation wards for developing capacity and supporting the health sector in fight against COVID-19.
The benchmark interest rate has already been reduced to 7 percent from 13.25 percent in early March. Since its inception up till 2nd July, Rs6.4 billion of concessional credits 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,” said the SBP.
The refinancing scheme is part of other financial assistances announced by the central bank to lend helping hands to banking customers in the challenging times. The SBP announced three measures to address the economic and health challenges posed by the spread of COVID-19: interest rate cut, refinancing scheme and temporary economic refinance facility. The central bank earmarked more than Rs100 billion in concessionary loans for manufacturing and health sectors to help them combat coronavirus challenges.