SBP launches financing facility to boost
exports
KARACHI: The State Bank of Pakistan on
Thursday introduced the export finance facility for locally manufactured
machinery with a view to promoting the export of locally manufactured plant and
machinery. This new financing facility will be effective from January 03, 2013
and remain valid till further instructions.
According to a circular issued by the State Bank, the exporters can avail long term financing facilities through banks for export of eligible plant and machinery and engineering goods under the facility. Financing facilities will be available both at pre- and post-shipment stages for a maximum period of five years.
The circular, while containing salient features of the facility, said financing for 5 years (including 1 year grace period) will be available for export of plant and machinery of the value of $10 million or more. Further, specified plant and machinery of the value less than $10 million will be eligible for 3 years (including six months grace period) financing. Other machinery items will be eligible for financing up-to one year.
According to the circular, financing will be available through banks, which are approved as participating financial institutions (PFIs) under the long term financing facility (LTFF). Requests of new banks will be processed as per SBP’s criteria.
Financing shall be available against letter of credit. However, financing will also be available against export contract for the tenor up to one year.
Refinancing will be available to the extent of total value of letter of credit/contract less advance payment, or 80 percent of the value of LC/contract, whichever is lower.
Finance to the exporters will be available at the rates applicable under the LTFF viz. 10.30 percent p.a. and 10.90 percent p.a. for 3 and 5 years, respectively.
However, as compared to LTFF, banks’ spread under this facility is being increased by 0.5 percent for 3 years financing to encourage the banks to extend financing to the non-traditional exporters i.e. engineering goods.
The repayment of principal amount of loan shall be made in equal half yearly or quarterly installments after grace period, if any. Mark up will be paid on quarterly basis.
This new financing facility will supersede the instructions concerning Part-B –Export Sales of LMM Scheme as contained in ICD Circular dated 27th April, 1987 read with subsequent amendments made from time to time, the circular said.
According to a circular issued by the State Bank, the exporters can avail long term financing facilities through banks for export of eligible plant and machinery and engineering goods under the facility. Financing facilities will be available both at pre- and post-shipment stages for a maximum period of five years.
The circular, while containing salient features of the facility, said financing for 5 years (including 1 year grace period) will be available for export of plant and machinery of the value of $10 million or more. Further, specified plant and machinery of the value less than $10 million will be eligible for 3 years (including six months grace period) financing. Other machinery items will be eligible for financing up-to one year.
According to the circular, financing will be available through banks, which are approved as participating financial institutions (PFIs) under the long term financing facility (LTFF). Requests of new banks will be processed as per SBP’s criteria.
Financing shall be available against letter of credit. However, financing will also be available against export contract for the tenor up to one year.
Refinancing will be available to the extent of total value of letter of credit/contract less advance payment, or 80 percent of the value of LC/contract, whichever is lower.
Finance to the exporters will be available at the rates applicable under the LTFF viz. 10.30 percent p.a. and 10.90 percent p.a. for 3 and 5 years, respectively.
However, as compared to LTFF, banks’ spread under this facility is being increased by 0.5 percent for 3 years financing to encourage the banks to extend financing to the non-traditional exporters i.e. engineering goods.
The repayment of principal amount of loan shall be made in equal half yearly or quarterly installments after grace period, if any. Mark up will be paid on quarterly basis.
This new financing facility will supersede the instructions concerning Part-B –Export Sales of LMM Scheme as contained in ICD Circular dated 27th April, 1987 read with subsequent amendments made from time to time, the circular said.
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Pakistan
EXCHANGE FOR CURRENCY NOTES:
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BULLION RATES IN RUPEES PER 10 GRAMS
KARACHI
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Gold Tezabi (24-ct) Rs 53,571
Silver Tezabi Rs 985.71
Fri, 4 Jan 2013
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