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  • FiscalRelief 29 Feb 2012

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    Ghazal Sambara Mungrani
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    The State Bank of Pakistan allowed banks, development finance institutions, and microfinance banks to write-off outstanding loans as of December 31, 2009 for borrowers in Lower Dir, Upper Dir, and Shangla districts under the Prime Minister's Fiscal Relief Package. The banks will bear the cost of write-offs covered by existing provisions and interest suspense, while the government will subsidize remaining costs. Banks can submit claims for reimbursement by April 10, 2012, subject to inspection and potential fines for ineligible amounts. The relief package was extended to residents of the three districts in Malakand Division.

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    FiscalRelief-29-Feb-2012

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    The State Bank of Pakistan allowed banks, development finance institutions, and microfinance banks to write-off outstanding loans as of December 31, 2009 for borrowers in Lower Dir, Upper Dir, and Shangla districts under the Prime Minister's Fiscal Relief Package. The banks will bear the cost of write-offs covered by existing provisions and interest suspense, while the government will subsidize remaining costs. Banks can submit claims for reimbursement by April 10, 2012, subject to inspection and potential fines for ineligible amounts. The relief package was extended to residents of the three districts in Malakand Division.

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    12 views1 page

    FiscalRelief 29 Feb 2012

    Uploaded by

    Ghazal Sambara Mungrani
    The State Bank of Pakistan allowed banks, development finance institutions, and microfinance banks to write-off outstanding loans as of December 31, 2009 for borrowers in Lower Dir, Upper Dir, and Shangla districts under the Prime Minister's Fiscal Relief Package. The banks will bear the cost of write-offs covered by existing provisions and interest suspense, while the government will subsidize remaining costs. Banks can submit claims for reimbursement by April 10, 2012, subject to inspection and potential fines for ineligible amounts. The relief package was extended to residents of the three districts in Malakand Division.

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    of 1

    February 

    28, 2012 
     
    SBP allows banks to write‐off outstanding loans of three 
    more districts under Prime Minister’s Fiscal Relief Package 
     
     
    The  State  Bank  of  Pakistan  (SBP)  has  allowed  banks/  development  finance  institutions 
    (DFIs)/ microfinance banks (MFBs) to write‐off the total outstanding loans as of December 31, 
    2009 of the borrowers of Lower Dir, Upper Dir, and Shangla Districts under the Prime Minister’s 
    Fiscal Relief Package to Rehabilitate the Economic Life in Khyber Pakhtunkhwa, FATA and PATA 
    as per guidelines given in SMEFD Circular No. 01 dated February 02, 2011.    
     
    Banks, DFIs and MFBs shall bear the cost of such write offs to the extent of amount held 
    into provision against Non Performing Loans (NPLs) and interest in suspense account, while the 
    rest of the cost will be paid by the Government of Pakistan as subsidy, says IH&SMEFD Circular 
    Letter No.2 of February 28, 2012.  
     
    After internal approvals to write off of outstanding loans of the borrowers of Lower Dir, 
    Upper Dir, and Shangla Districts under Fiscal Relief Package of the Government, the banks/DFIs 
    /MFBs may submit claims to the office of SBP‐BSC (Bank), Peshawar on prescribed format duly 
    audited and authenticated by their Internal Audit up‐to April 10, 2012. 
     
    The amount to be reimbursed by SBP‐BSC (Bank), Peshawar shall, however, be subject 
    to  on‐site  inspection  by  SBP’s  Inspection  Department  and  if  any  amount  claimed  found 
    ineligible, the same shall be required to be refunded by the concerned institutions along‐with a 
    fine of 25% of amount reimbursed, the Circular Letter added. 
     
    It may be pointed out that the Finance Division, Government of Pakistan informed the 
    State  Bank  that  the  Prime  Minister  has  approved  to  extend  the  facility  of  writing  off  of  total 
    loans  outstanding  as  on  31‐12‐2009  to  the  residents  of  Lower  Dir,  Upper  Dir,  and  Shangla 
    Districts of Malakand Division under Fiscal Relief Package.  
     
    It may be recalled that banks, DFIs and MFBs were earlier allowed to write off the entire 
    loans  outstanding  as  of  December  31,  2009  of  the  borrowers  of  Malakand,  Swat,  Buner  and 
    Chitral Districts.  
    **** 

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