Circulars/Notifications / Infrastructure, Housing & SME Finance Department  

 SMEFD Circular Letter No. 05 of 2010
April 22, 2010 

The Presidents/ CEOs,
All Banks/DFIs

Dear Sirs /Madam,

Long Term Financing Facility (LTFF) -
Rates of Fine on Shortfall in Projected Exports

 

Please refer to Para 7 (k) of LTFF Scheme which was circulated vide MFD Circular No. 07 dated December 31, 2007 regarding shortfall in projected export sales.

2. In this connection it is advised that in case projections made by the borrowers in respect of export sales are not met, following rates of fine will be applicable:-

Description
Rate of fine
i

In case actual exports sales are short up-to 10% of projected exports which has been reported by the borrowers, to the financing bank/DFI, at the time of availment of financing under LTFF Scheme.

No fine
ii

In case actual exports sales are less than 50% of projected exports.


Paisa 37 per day per Rs 1000/- or part thereof, on adjusted value of outstanding refinance under LTFF Scheme.

iii


In case actual exports sales are 50% or more than 50% of projected exports.


Paisa 28 per day per Rs 1000/- or part thereof, on adjusted value of outstanding refinance under LTFF Scheme.


Note:
Adjusted value will be derived by multiplying the percentage of shortfall in export sales with outstanding amount of refinance under the Scheme. E.g. outstanding refinance as of 30-06-2010 is Rs 500 million and borrower exported equivalent to US $ 2.5 million during FY 2009-10, instead of projected exports of US$ 5 million, the adjusted value of outstanding refinance would be Rs 250 million [500×50%]

However, no fine shall be charged in case the borrower achieve minimum export target prescribed under LTFF scheme (viz. 50% of annual sales or US$5 million, whichever is lower).


3. Further, financing banks/DFIs shall continue to keep track of borrower’s export performance; and submit the position to the inspection teams of SBP’s Banking Inspection Department at the time of their inspection, if so desired.

4. Other terms & condition of the Scheme shall remain unchanged.


Yours faithfully,

Sd/-
(Mansoor H. Siddiqui)
Director


       
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