Financial institutions advised to reschedule loans

KARACHI: The State Bank of Pakistan (SBP) on Tuesday advised microfinance banks to reschedule loans to borrowers of the flood-affected areas under the existing prudential regulations, where the possibility of recovery exists.

For all such rescheduled/restructured loans and advances, the microfinance banks may defer loan provisioning up to December 31, 2011, the SBP said in a circular.

Similar advice was issued to banks and development finance institutions (DFIs) for providing relief to the borrowers of the flood-affected areas to reschedule agriculture and SME loans and advances.


The central bank said that the banks and development finance institutions may defer loan provisioning up to December 31, 2011 for all such rescheduled/restructured loans and advances. This relaxation for abovementioned categories is available for loans and advances, which have become non-performing since July 1 in the affected areas identified by NDMA.