All Banks/ DFIs

Dear Sirs/Madam,

SCHEME FOR FINANCING LOCALLY MANUFACTURED MACHINERY
RATES OF SERVICE CHARGES FOR THE YEAR 2005-2006

Please refer to BPD Circular No. 25 dated 24th July, 2004 on the captioned subject.

In this connection it is advised that effective from 1st July 2005 the rates of service charges for different tenors under the LMM Scheme have been fixed as under:-

Tenor	Rate of refinance to be paid by the PFIs to SBP	Maximum Rate of Finance to be charged by PFIs from the borrowers
For financing upto 6 months.	8.00% p.a.	10.00% p.a
For financing exceeding 6 months but upto 2 year.	8.50% p.a.	10.50% p.a
For borrowers requiring financing over two years upto maximum period i.e. 7 ½ years.	9.50% p.a.	11.50% p.a

The above rates shall remain effective until June 30, 2006. However, other instructions on the subject shall remain unchanged.

Please acknowledge receipt.