Due to the prevailing situation with COVID-19 spreading globally, business activities have slowed down considerably. It is expected that a number of people will lose their jobs and receive salary cuts from employers and will be unable to generate their income in the case of self-employed individuals.
In this case, many are likely to be financially vulnerable to default the loans availed from banks under different heads of consumer financing— housing and auto finance, personal loans and credit cards.
State Bank of Pakistan (SBP) has come up with a relief payment scheme for them to make things easier.
There are two types of schemes for customers under this relief.
- A customer can get a year’s relief for the payment of loans. They will be given relief on the principal amount of loan whereas they will continue to pay its interest payment without any additional charges.
- If a customer is running into a deep financial crisis, and can’t even pay his/her loans even after a year, they can request rescheduling and restricting loans.
These schemes apply to the loans or financing made on the account of housing and auto finance, personal loans and credit cards.
- Customers who have regularly paid their loan installments till December 31, 2019, are eligible for availing this relief scheme. If you have missed any of the installments before this date, you will not be given any relief– neither a yearlong deferred payment plan nor rescheduling or restricting of loans.
- Banks will receive your request and assess your financial vulnerability.
Banks have your personal record including a source of income, place of residence and etc. You will have to prove to the bank that why you need this relief. Be ready to respond to a set of questions from bank officials.
If you are drawing a good salary and working on a good position at a reputed organization, you might not be given the relief by the bank mainly for housing & auto finance and personal loans.
For the loan against credit cards, banks will examine your credit and repayment history. Banks may reject your request if you spend too much on luxury items and services. You can be lucky, if you meet the criterion of being regular till December 31. Some banks will never ask anything from you regarding your financial needs or weakness to pay bank installments.
Bank will respond to your request in the next 15 days whether you are given this relief or not.
In case, you think you qualify for this facility and you are denied by the bank, you can make a complaint to the State Bank of Pakistan (SBP) at [email protected] or 021- 99218148. The central bank will review your request and give its opinion.
Date of Commencement and Deadline
- Customers could avail the facility from their dealing bank now. It already commenced since it was announced a couple of days ago.
- Customers could request for this relief through a call to phone banker and through email.
- Phone bankers will verify your details including CNIC #, Account #, Credit Card #, Date of Birth, etc.
- There is no need to visit the bank branch, particularly in the prevailing situation.
- If the phone bankers do not register your request, you may lodge your complaints with the SBP.
- The deadline for availing this scheme is June 30, 2020.
New Loans Facility
If you haven’t availed any of the banks’ financing facilities or you are looking for getting one in order to meet your personal expenses, the commercial banks have a facility for you on easy terms.
State Bank of Pakistan (SBP) has increased the Debt Burden Ratio temporarily from 50 percent to 60 percent.
It means if your earning or take-home salary is Rs. 100,000, you can pay a monthly installment of Rs. 60,000 on personal loans. This loan is required for the urgent requirements for the purpose of business and personal needs.
Moreover, the bank could sanction up to 15 percent more than the required amount if it is needed. For instance, if you qualify for a loan of Rs. 1 million your loan limit could be exceeded to Rs. 1.15 million on your request by the banks you are dealing with. The amount will be repayable equally in the next twelve-monthly bill payments.
Bank will determine the repayment capacity and creditworthiness of the borrowers.
The most common requirements are CNIC copy, salary slips, bank statements of the last six months, etc.
In the case of self-employment, the bank may ask you to present a guarantee or guarantor.
This facility is available until the end of March 2021. Some of the steps could vary from the above-mentioned details. It depends on your bank.
Banks Need To Ready Relief Facility of Consumers Financing
The management of the banks should finalize the policy and modals of this relief scheme as soon as possible.
Many of the customers reported that they made phone calls to their banks and the representatives flatly responded that they are not aware of such a relief scheme.
It is true that banks are operating with limited staff in the prevailing situation of lockdown but they need to speed up their working on modalities against this policy. Hopefully, the facility will be available in the coming days at every bank.