Please refer to SMEFD Circular No.16 dated November 2, 2010 read with IH &SMEFD Circular No. 04 dated May 25, 2011on the captioned subject.
2. It has been decided to allow debt-swap facility to banks/DFIs against banks’ short term outstanding loans of Rice Millers & Grain Traders disbursed from own sources since November 02, 2010 i.e. after issuance of SBP’s above refinance Scheme, on following terms & conditions:-
- Only Rice Millers & Grain Traders of Sindh & Baluchistan of designated flood affected areas will be eligible for debt swap facility from the date of this Circular under Refinance Scheme for Revival of SMEs and Agriculture Activities in Flood Affected Area.
- Only principal of outstanding loans that have been disbursed as fresh loans and loans renewed after full adjustment of principal and mark-up of existing loans, since November 02, 2010 will be eligible for said facility.
- Mark-up under above Scheme will be applicable from the date of disbursement of refinance by SBP. Mark-up up-to the date of refinance shall be paid by the borrowers to the concerned banks as per terms & conditions of the existing loan agreements.
- Debt swap facility will not be available against non-performing loans (NPLs) classified under SBP’s Prudential Regulations.
- The refinance provided under these arrangements will be subject to the terms & conditions laid down in Refinance Scheme for Revival of SMEs and Agriculture Activities in Flood Affected Area.
- Refinance shall be allowed to the banks/DFIs by the concerned offices of SBP BSC (Bank), on submission of Refinance Application along-with Consolidated Statement for Refinance & DP Notes of the borrowers (formats attached), against the limits sanctioned by SBP in their favor under the scheme.
- Said facility shall be checked by Banking Inspection Department (BID) during inspection of the banks/DFIs to ensure that this has been allowed as per laid down criteria. Any discrepancy/ delinquency pointed out by BID shall be subject to penal action, as per provisions of Banking Companies Ordinance.
3. Refinance facility under above arrangements is a one-time opportunity and will remain valid up to September 15, 2011. Banks/DFIs should expeditiously process the debt swap cases to be received by them, otherwise eligible under above Scheme/arrangements, and approach concerned offices of SBP BSC (Bank) for obtaining refinance well ahead of the given deadline. No case will be received after the prescribed deadline.
4. To accommodate eligible borrowers for Debt Swap facility, banks/DFIs can approach SBP for enhancement in their existing limits or sanctioning of fresh limits, if required.
5. Other terms and conditions of the Scheme remain unchanged.
Encl: As above