Govt markup rate on loans to provinces, SOEs raised

The government has increased the markup on development loans and advances to the provincial, local bodies, state-owned enterprises (SOEs) and public sector financial institutions by almost one percentage point for the previous fiscal year, which ended on June 30. In a notification issued on Thursday, the finance ministry has fixed the markup rate for the 2021-22 fiscal year at 11.2 per cent, up from 10.30pc a year ago. The federal government charges these markup rates on cash development loans to the provincial governments, Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan, besides loans extended to local bodies, public sector entities (PSEs), corporations, autonomous bodies, financial and non-financial institutions and capital outlays of the federal government in the commercial departments. Since the 2017-18 fiscal year, the markup charged by the federal government has increased from 6.62pc.