Call for passing on full benefit of reduced interest rates to consumer borrowers of banks
- June 10, 2020
Tahir Abbasi, Senior Vice President, Islamabad Chamber of Commerce and
Industry said that 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, he said that 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, he demanded 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.
Tahir Abbasi 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.