Undoubtedly, the novel COVID-19 disrupted the economy of Pakistan. To mitigate the impact of coronavirus, State Bank of Pakistan introduced a new scheme “Islamic Refinance Scheme for Payment of Wages & Salaries to the Workers and Employees of Business Concerns”. Primary purpose of the Scheme is to facilitate the businesses in making payment of salaries and wages to the staff. The idea behind the scheme is to support continued employment in the country in such a challenging situation and it will be expected to ease the cash flow constraints to the employers. Salient features of the scheme are as follows:
Scope and eligibility criteria
The objective of the scheme is to finance salaries and wages of permanent, contractual, daily wagers as well as outsourced employees of existing as well as new customers of banks and DFIs for the months from April 2020 till June 2020. Government entities, public sector enterprises, autonomous bodies and financial institutions will be considered as exception to the scheme.
Maximum financing limit
Under this scheme, maximum limit of a customer will be determined in the following way:
Category | Wage bill for 3 months | Financing limit | Maximum financing limit |
A | Less than or equal to Rs. 200 million | 100% of actual 3 months wage bill | Rs. 200 million |
B | More than Rs. 200 million and less than or equal to Rs. 500 million | Rs. 200 million or 75% of actual 3 months wage bill, whichever is higher | Rs. 375 million |
C | More than Rs. 500 million | Rs. 375 million or 50% of actual 3 months wage bill, whichever is higher | Rs. 500 million |
Customers availing this scheme will not be allowed to lay off their employees during first three months.
Financing tenure
The repayment under this scheme will be made in eight equal quarterly installments and the repayments will start from January 2021.
Rebate for filers
State bank of Pakistan will be offering a rebate of 1% (reduction in rate of refinance / service charges) to those who are listed as active taxpayers as per Income Tax Ordinance, 2001.
Validity
The scheme is valid till 30th June 2020.