Please refer to MFD Circular No. 6 dated October 30, 2007 and Government of Pakistan’s SRO No. 973(I)/2007 dated 6th September, 2007 on the captioned subject. It is advised that Finance Division, Government of Pakistan has announced some modifications in mark up rate subsidy of 3% to spinning mills vide their Notification No. F.1(1)BKG(R&S)/2007 dated 20th February, 2009.

2.         In pursuance of the government’s above notification, following amendments have been made in the Mark-up Rate Subsidy Scheme for Spinning Sector with immediate effect: -

i. The period of mark up rate subsidy has been enhanced from one year to two years from 1st July 2007 to 30th June    2009.

ii. The subsidy for the period from January 01, 2008 to December 31, 2008 shall be paid in March 2009. Subsidy for six     months period ending on June 30, 2009 (from 01-01-2009 to 30-06-2009) shall be paid in July 2009 subject to necessary budgetary allocations for the FY 2009-10.

iii. Those spinning mills that could not avail subsidy for the first six months ending on December 31, 2007 due to their      inability to seek settlement of their overdue loan installments or any other reason may also file claims separately to      their banks for availing 3% mark up subsidy of said period in March 2009, provided their default has since been settled

3.     Banks / DFIs can pay the amount of subsidy to the eligible borrowers of spinning sector, to be calculated keeping in view the guidelines given in MFD Circular No. 06 dated October 30, 2007 as well as above modifications. After making payments of 3% mark up rate subsidy, banks / DFIs can approach the concerned offices of SBP-BSC (Bank) for reimbursement of the same, along-with duly filled in application form on the Revised Format (copy enclosed). Banks/DFIs must ensure that all eligible cases are submitted to the respective offices of SBP-BSC (Bank) during the period prescribed for payment of subsidy. No subsidy claim shall be entertained after 31st March 2009 and 31st July 2009 for the respective periods of subsidy.

4. Other instructions on the subject shall remain unchanged.

Encl: As above