SBP offers concessionary rates for companies to pay salaries during virus lockdown

KARACHI: The State Bank of Pakistan (SBP) on Friday announced loans at concessionary rates for companies to be able pay their employees' salaries during a lockdown imposed to contain the coronavirus pandemic.

In a statement, the central bank said companies could borrow an amount equal to the sum of their employees' remuneration for the months of April, May, and June at a lowered interest rate in order to ensure that people were paid during the lockdown and the economic impact from COVID-19 crisis could be controlled.

Aimed at discouraging mass lay-offs — which economists have predicted could be between 12.3 million to 18.5 million — in the country owing to lockdowns amid the coronavirus outbreak, the SBP's scheme offers 4-5% interest rate for companies whose aggregate salaries expenses equal Rs200 million.

On the other hand, companies that pay Rs500 million in total salaries were offered 50% financing facility, the central bank added.

Companies that obtain any loans to pay salaries would be liable to repay the principal amount by two years, it said, adding that they could also apply for a six-month extension.

It also forbade commercial banks from charging any fees on three aforementioned months' worth of salaries.