Post Reply 
 
Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Bank personal loans mark-up hits 26-29pc
09-13-2008, 05:36 PM
Post: #1
Bank personal loans mark-up hits 26-29pc
Bank personal loans mark-up hits 26-29pc
By JAVED MAHMOOD and ERUM ZAIDI submitted 17 hours 25 minutes ago
KARACHI - The mark-up rate for personal loans had reached the highest ceiling of 26-29 per cent in this financial year, The Nation learnt.
In 2007-08 the domestic banks were offering personal loans at 18-22 per cent, but in August the mark-up rate for the issuance of personal loans had been raised 26 to 29 per cent, sources in banking sector said.
At present after the credit cards, the personal loans envisage the highest rate of interest, said bankers. It can also be said that the personal loans mark-up rate in Pakistan is the highest-ever in the world, they said. Bankers pointed out that the discount rate had been raised to 13 per cent while the Karachi Interbank Operations Rate had breached 14 per cent as a result the banks have raised the mark-up rates for the personal loans and the credit cards during the past few months.
Worth noting is that the banks offer personal loans at 25 to 26 per cent to only those individuals whose companies/groups exist on the list of approved companies of the banks.
However, if the borrower does not belong to the non-approved companies list, he would have to pay the maximum rate of mark-up, 29pc, a banker said.
Presently most of the leading banks are offering personal loans, but at very expensive rate of return.
Bankers pointed out that the demand of personal loans and credit cards had declined substantially because of unprecedented and unexpected increase in the mark-up rates since the appointment of SBP Governor Dr Shamshad Akhtar, who is consistently inflating the discount rate although this recipe had not only flopped miserably to control inflation, but also landed the borrowers in trouble who had to pay more mark-up.
The one-point strategy of hike in the discount rate had also increased the magnitude and risk of default of consumer loans, landing the banks and the borrowers into a serious trouble, bankers said. Bankers said that as the SBP Governor’s policy had miserably flopped to achieve the desired results, she should be removed immediately from the top slot of the central bank.
The record surge in markup rates being charged by the commercial banks have substantially declined the growth in all categories of consumer disbursements. In a wake of current monetary policy along with 13 percent discount rate, consumers of personal loans are facing increase additional financial expenses include high markups and bank charges, becoming lenders more restraint to avail consumer financing facilities.
On account of growing non-performing loans which swelled to 212.3 billion rupees at the end of June 30, 2008 that made banks vigilant to extend auto and personal loans while some of the banks are still providing credit cards financing facility to their consumers. The sharp growth in consumer disbursement had yielded the banks advances growth during Jan-March 2008. However, with the hike in interest rates, the demand in consumer financing has been declining for the last 3 months.

http://www.nation.com.pk/pakistan-news-n...its-2629pc
Find all posts by this user
Quote this message in a reply
Post Reply 


Possibly Related Threads...
Thread: Author Replies: Views: Last Post
  Real estate market hits growth trail again Salman 0 4,996 02-25-2014 01:15 PM
Last Post: Salman
  Park Enclave development hits snags Salman 0 4,098 05-17-2012 01:30 PM
Last Post: Salman
  Underpass project hits snag Salman 0 3,732 04-02-2012 12:30 PM
Last Post: Salman
  1000MW Iran electricity to Pak plan hits price snag Salman 0 4,596 02-01-2012 01:25 PM
Last Post: Salman
  Mutual funds industry crosses Rs 300bn mark Salman 0 3,692 12-21-2011 01:25 PM
Last Post: Salman
  Meezan Bank wins CFA bank of the year award Lahore_Real_Estate 0 4,519 11-02-2011 12:33 PM
Last Post: Lahore_Real_Estate
  New crown prince: A mark of stability Lahore_Real_Estate 0 3,211 11-01-2011 04:15 PM
Last Post: Lahore_Real_Estate
  Funds shortage hits city sewage treatment plan Lahore_Real_Estate 0 3,721 10-17-2011 03:16 PM
Last Post: Lahore_Real_Estate
  Gaddafi on the run as revolt hits Tripoli Lahore_Real_Estate 0 3,089 02-22-2011 02:03 PM
Last Post: Lahore_Real_Estate
  ZTBL to enhance agri loans Lahore_Real_Estate 0 3,351 01-27-2011 02:52 PM
Last Post: Lahore_Real_Estate
  SBP Increase Personal Loan LImit Upto Rs 3.0 Million LRE 0 4,103 01-08-2011 12:54 AM
Last Post: LRE
  Sugar hits highs; Rs110/kg in villages Lahore_Real_Estate 0 3,103 11-08-2010 03:04 PM
Last Post: Lahore_Real_Estate
  Dengue fever hits Lahore Lahore_Real_Estate 0 3,388 10-25-2010 03:57 PM
Last Post: Lahore_Real_Estate
  ZTBL allocates Rs 60.34b for giving loans to farmers Lahore_Real_Estate 0 3,790 10-14-2010 12:36 PM
Last Post: Lahore_Real_Estate
  CIA chief takes tough line on drone hits Lahore_Real_Estate 0 4,017 10-01-2010 12:17 PM
Last Post: Lahore_Real_Estate
  Petrol crunch hits City Lahore_Real_Estate 0 3,432 09-16-2010 12:06 PM
Last Post: Lahore_Real_Estate
  Flood hits two historic cities Lahore_Real_Estate 0 3,254 08-19-2010 01:29 PM
Last Post: Lahore_Real_Estate
  CDGK's Thado Dam project hits snags Lahore_Real_Estate 0 3,820 06-15-2010 09:43 AM
Last Post: Lahore_Real_Estate
  PTCL launches personal global number for corporate customers Lahore_Real_Estate 0 3,650 06-12-2010 11:52 AM
Last Post: Lahore_Real_Estate
  Parlimentarians, their foreign deposits, their loans from Pak Banks & Pak Economy! LRE 0 3,899 04-27-2010 06:14 PM
Last Post: LRE

Forum Jump:


User(s) browsing this thread: 1 Guest(s)