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ISLAMABAD: The government on Friday reduced by almost 6 percentage points the mark-up chargeable on development loans and advances to the provincial, local bodies, state-owned entities and public sector financial institutions for the outgoing fiscal year ending on June 30.
In a notification issued by the Ministry of Finance, the mark-up rate for 2025-26 was fixed at 11.89 per cent against 17.74pc in 2024-25 and 17.84pc in 2023-24, which had gone up substantially (more than 73pc) when compared to 10.30pc in 2020-21.
The drop in mark-up chargeable on development loans and advances was because of a decline in the central bank’s policy rate, which had declined from a peak of 22pc to 11.5pc.
These mark-up rates are charged by the federal government on cash development loans (CDLs) to the provincial governments, 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.
