Honorable Prime Minister of Pakistan, announced a Fiscal Package of over Rs.1200 billion in the wake of Covid-19 Pandemic. ECC of Cabinet Division has approved the proposals on 13th May 2020. Out of this Package, an amount of Rs. 6.861 billion has been approved for provision of financial relief in terms of markup subsidy on Bank’s loans to the most deserving sub segment of farming community, i.e. farmers with land holding up to 12.5 acres, throughout the country.
Over 70 % of the growers in Pakistan, own land up to 12.5 acres. A Mark-up subsidy @ 10 % on the loans extended or to be extended during the fiscal year 2020-21 to the farmers of 12.5 acres of land has been approved by the Government of Pakistan. Total amount of subsidy is Rs.6.86 billion. All the loans with passbook as collateral are eligible to avail the subsidy. Salient features of the mark-up subsidy are:
i. Government of Pakistan shall bear markup @ 10 % on agricultural loan disbursed/to be disbursed to above mentioned sub segment of farming community during fiscal year 2020-21 and balance markup shall be payable by the individual farmers on the loan amount availed from ZTBL.
ii. ZTBL under a mutually agreed/predefined mechanism with Ministry of National Food Security shall pass on the involved subsidy to all the borrowers with 12.5 acres of land holding.
iii. The farmers with land holding of up to 12.5 acres, all over the country shall be eligible for subsidy.
iv. The borrowers/farmers offering ONLY collateral of Agri. land under Pass-Book shall be entertained for subsidy.
v. Farmers availing agricultural finance facility under any other collateral; i.e residential /commercial property, Gold, Defense Certificate and Cash, shall NOT be qualified for any relief under the package.
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