Circulars/Notifications - Banking Supervision Department  
 BPRD Circular No. 21
June 29, 1998   

All Banks/NBFIs

Dear Sirs,

FINANCING FOR EXPORTS

 

Please refer to BPRD Circular No.27 of 26th July, 1997-alongwith other instructions issued on the captioned subject from time to time.

2. It has been decided to reduce the maximum rate of finance to be, charged by the banks/NTBF's from their borrowers Under Export Finance scheme as also Export sales under the Scheme for Financing Locally Manufactured Machinery from existing 11% p.a. to 8% p.a. These instructions shall be applicable on the final1cing facilities provided by commercial banks/NBFI's both Under "Investment Type" and Trade related" modes of financing.

3. Where refinance is obtained by the financial institution against provided under the above mentioned schemes ,the State Bank will share in the overa1l profit of the financial institution concerned, subject to a maximum of 6% as against 9% subject to observance of usual provisions prescribed in this regard- Suitable amendments may accordingly, be made in ICD Circular 13 of November 13,1994.

4. As a sequel to above, reduction in the rate of finance/refinance scheme and with a view of avoid mis-utilization of the financing facilities availed, it has been decided to enhance the existi11g scales of fine (of. BPRD Circular No.23 dated 28th July,1996 applicable on exporters who fail to honour their commitments under Export Finance Scheme as Under :-

'The rate of fine on account of non-shipment/short shipment and delayed shipment Under Part-I of the Scheme shall be paisa 37 per day per Rs 1000 or part thereof

ii) In case an exporter who has obtained refinance under Part-II of the Scheme fails to match his borrowing by prescribed export performance he shall be subjected to a find of Paisa 37 per day per Rs 1000 or part thereof for the shortfall in the total daily product of exports undertaken by him. the revised scale of fines shall be applicable on the facilities availed for the monitoring year 1998-99 and onward.

5. Further in order to give boost to poultry industry it has been decided to provide concessionary export finance for 150 days from export of "Eggs for hatching" and "Day old chicks". Your are, therefore, advised to please make following amendment against Harmonized Code No. 01.05 of the aforesaid list of in-eligible commodities, circulated vide ICD Circular No. 9 dated 29th October, 1991:-

Commodity

Harmonized Code Main Harmonized Code (ITC)

Remarks
1. Live Animal 01.05
Excluding "Eggs for hatching" and "Day old chicks".

6. Attention of Banks is also invited to BCD Circular No.16 of' July 25, 1990, in terms of which concessionary financing facilities under Export Finance scheme, are already available to Pakistan Consultancy/and Construction Firms who are awarded Contracts of Consultancy/and Construction abroad. Banks are therefore advised to allow Export Finance under Part-I. of the Export Finance Scheme, to construction and consultancy firms, for the purpose of acquiring and exporting goods and services from Pakistan, for their own use in the country awarding the contract with the prior approval from the Director Banking Policy & Banking Regulations Department; SBP: , CD:, Karachi.

7. It is also added that the State Bank is in the process of reviewing the existing instructions of the Export Finance Scheme, in term of Which financing facilities under the Scheme, shall also be made available to Small Medium Enterprises (SMEs) direct or indirect exporter Detailed lnstructions in this regard shall be issued separately.

8. The above instructions shall be applicable from 1st July, 1998

9. Other instructions on the subject shall remain changed

Please acknowledge receipt

Yours faithfully,
Sd/-(Mansur-ur-Rehman Khan)
Director

       
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