i.
The purpose of loan must only be to finance the loan portfolio
of MFB/Is.
ii.
Borrowing may be raised in major four currencies namely
USD, EUR, GBP and JPY.
iii.
Minimum Tenor of the FCY borrowing should not be less
than 2 years.
iv.
The loan pricing will be based on a reference rate such
as LIBOR. Interest rate may be decided on best possible
terms, and must be competitive to other options available
locally.
v.
The disbursed FCY funds will immediately be converted
into PKR and credited to borrowing MFB/I’s PKR account
maintained with the concerned Authorized Dealer (bank).
Under no circumstances MFB/Is will be allowed to retain
such funds in foreign currency.
vi.
The borrowing MFB/Is will be allowed to make payment of
the principal amount in bullet at maturity or may start
repayment of principal in installments after six months
through the Authorized Dealer receiving disbursement of
loan. However, frequency of the interest payment may be
made in accordance with the related repayment schedule.
vii. Authorized Dealers may provide forward cover/hedging
facility on the foreign currency loans to the MFB/Is from
the inter-bank market in accordance with the prevailing
foreign exchange regulations.
viii.
The MFB/Is will provide an undertaking that the loan deal
is compliant with the provision of legal and regulatory
framework applicable to the lender and the borrower.
ix.
Draft Term Sheet agreed between the lender and borrowing
MFB/Is should be submitted to SBP while approaching for
in-principle approval. However, for formal approval, MFB/Is
will approach SBP through Authorized Dealer (bank).
x.
MFB/Is will ensure that internationally acceptable ‘Know
Your Customer’ (KYC) standards for the Lending institutions/lenders
are complied. Funding should only be obtained from quality
lenders which comply with KYC standards.
xi.
Any change/deviation in the terms and conditions after
obtaining formal approval from SBP will require prior
clearance from SBP.