SBP Unveils RDRSIU-2025 for Industrial Revival

Islamabad, July 24, 2025, 09:32 PM PKT — The State Bank of Pakistan (SBP) has unveiled a bold strategy, launching the draft framework Revival and Debt Resolution of Sick Industrial Units (RDRSIU-2025) to tackle financial distress in Pakistan’s industrial sector, aiming to revive non-performing, sick, or dormant units through debt restructuring, including targeted settlements, principal haircuts up to 60%, and rescheduling based on viability, per official details. This initiative engages government-owned financial institutions (GOFIs) to promote accountable restructuring, clean bank balance sheets, and spur new lending, targeting registered entities defaulting for four quarters and operating below 30% capacity for a year, excluding fraudulent borrowers.

Borrowers are categorised as viable, marginally viable, dormant, or fraudulent, with tailored strategies—interest cuts, tenor extensions to 10 years, working capital support, early repayment options, and tax-deductible haircuts—overseen by bank boards. Full settlements are targeted within 12–24 months, with monthly reports on cases, loan amounts, and revival progress, bolstered by board subcommittees and NPL-linked incentives for transparency. The textile sector, hit by a 10% cost disadvantage from high energy tariffs, delayed refunds, and interest rates, is a focus area. The Securities and Exchange Commission of Pakistan (SECP) proposes amendments to the Corporate Rehabilitation Act, 2018 for faster out-of-court resolutions. Valid for 10 years with a mid-term review after 18 months, the framework aims to revive capacity, create jobs, reduce NPLs, and boost credit. Web context shows industrial recovery efforts, while posts found on X reflect hope and skepticism—some see relief, others doubt execution. Critically, the narrative of “industrial revival” may mask structural barriers—web data hints at past failures, and X sentiment suggests distrust in effective outcomes, pointing to potential challenges.