Pakistan bound to return Saudi Arabia's $3 billion loan within 72 hours of request: Report

Keeping in mind Pakistan's financial crisis and its prior records of paying back debts, Saudi Arabia this time has laid down stringent clauses for Imran Khan-led nation in exchange for its $4.2 billion loan pack. According to Federal Minister for Information and Brocasting Faw Chaudhry, Saudi Arabia has agreed to give a $3 billion cash deposit to Pakistan for a year with a caveat that country would be bound to return it anytime on a three-day tice.

According to a report by  Express Tribune, Imran Khan cabinet on Saturday approved $3 billion cash deposit agreement and $1.2 billion oil on deferred facility agreement through circulation of summaries. Unlike in past, this time Pakistan has  option for rollover and would have to return loan back after one year. Moreover, in case of a sovereign default by Pakistan,  country would be asked to pay back loan in 72 hours of a written request by Saudi Arabia.

Interest rate on loan 1.4 times higher

report also quoted Finance Ministry sources saying that  $3 billion cash facility has been secured at an interest rate of 4%. rate is one-fourth times higher than previous similar facility that Pakistan h obtained at a 3.2% interest rate, which means that Pakistan will pay $120 million interest on loan.

"Saudi Arabia has also spelled out terms of defaults, which would le to immediate withdrawal of cash deposits,"  Express Tribune said quoting sources. "A delay in timely interest payment would be deemed as default on agreement," it ded.

stringent clauses come after Pakistan scrambled to pay back Saudi's USD 1 billion last year.  country ultimately mand to pay back part of a loan after its all-wear friend - China - came to Imran Khan's rescue. A report by Pakistan's Ministry of Finance information revealed that Saudi Arabia provided neighbouring country with a $6.2 billion financial pack for three years in 2018 which Saudi claimed back "ahe" of its schedule. Pakistan h repaid loan to Saudi after taking a loan of same amount from China.

(Im: PTI)