SBP allows relief on consumer loans’ principle

KARACHI: The State Bank of Pakistan (SBP) on Tuesday has announced one year moratorium for consumers loans amid coronavirus outbreak. The banks and development finance institutions (DFIs) are directed to defer the principal amount on consumer loans for one year to facilitate borrowers.

Through it official twitter account, the central bank posted that borrowers availing consumer finance for auto, housing, and personal loans and credit cards, who were regular on their payments up till December 31, 2019 could request banks to defer principal amount for one year without fee or increase in mark-up. However, it said that they would continue to service the mark-up amount.

Additionally, borrowers who are unable to service the mark-up amount or need deferment exceeding one year, may request the bank to reschedule/ restructure their facilities, without affecting the borrower’s credit history, the bank said.

The central bank in a previous circular incorporating revised prudential regulations said that banks/DFIs, upon a written request of an obligor received before June 30, 2020, would offer deferral of principal comportment of installments for one year, unless the customer requests for a shorter period, at no fee or increase in mark-up rate or mark-up on mark-up; provided that the obligor would continue to service the mark-up amount as per agreed terms and conditions.