Jun 10, 2020: The State Bank of Pakistan has gradually reduced the policy interest rate from 13.25 per cent to 8 per cent, which is commendable as it would provide cheap loans to the business community and facilitate the better growth of business activities and investment.
However, the benefit of reduced interest rate has not been passed on to the consumer borrowers of commercial banks as they are repaying loans with old mark up.
Therefore, the State Bank of Pakistan to issue instructions to the commercial banks to immediately pass on the full benefit of interest rate reduction to all their consumer borrowers and reschedule their loans accordingly.
This was stated by Senior Vice President Islamabad Chamber of Commerce and Industry Tahir Abbasi, a press release said.
He said that consumer borrowers buy cars, houses and other household items by taking loans from commercial banks, so there is a need to transfer the full benefit of SBP’s interest rate cuts to them instead of forcing them to pay loans with previous mark up.
He urged that SBP should pay immediate attention to this issue and pass instructions to all commercial banks to transfer full benefits of interest rate cuts to their consumer borrowers. It will not only make it easier for consumers to repay their loans, but will also boost business activities by increasing the purchasing power of people.
