Circulars/Notifications - Banking Supervision Department  
 BSD Circular No. 33
27 September , 2001  

All Banks,

Dear Sirs,

EXPORT  FINANCE  SCHEME FINANCE  TO  IT  ENABLED  SERVICES

 

As you are already aware, the Government is strongly committed towards promotion of information technology as also towards its export.  In this context several instructions to promote financing of software exports by banks have been issued by State Bank.  It may be added that in terms of instructions contained in BPRD Circular No.5 dated 3rd March, 1997, software exports have already been declared an eligible item under the Export Finance Scheme.

2.         The recent expansion in IT enabled services worldwide (in 2000 the volume was $ 142 billion) provides Pakistan an opportunity to capture some share of this market.  Instances have been brought to our notice that banks are reluctant to extend financing to IT enabled services.  Under these services, business houses / enterprises established abroad outsource their business to some overseas software houses which in turn provides a variety of IT enabled services to such business house / enterprise.  These services are listed in Annexure-I.  In other words, IT enabled services would cover such type of software remote services extended by Pakistani exporters / software houses, for and on behalf of an overseas business house, where information is created, disseminated, processed or stored for commercial purposes that can create employment in the country and is used for exports.

3.         It is, therefore, clarified that all IT  enabled software remote services shall be eligible for export  financing  under the Export Finance Scheme in the same manner as software exports. IT Exporters desirous of availing financing facility from their banks shall have to produce a valid Contract executed with their foreign buyer or export letter of credit established by the banks evidencing export or rendering of IT enabled services against which export proceeds in foreign currency will be realized through normal banking channels.  SBP shall provide refinance in all such cases as per usual terms and conditions contained in BPRD Circular Letter No.23 dated October 20, 1998. 

 

            Please acknowledge receipt.

Click here to see the Enclosure. 

Yours faithfully,
(Kazi Abdul Muktadir)
Director
       
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