Please refer to SMED Circular No.12 dated June 30, 2006 alongwith other instructions issued from time to time on the captioned subject.

2. It has been decided that rate of refinance under the Export Finance Scheme (EFS) with immediate effect shall be 6.50% p.a. The commercial banks shall, however, ensure that where financing facilities are extended by them to the exporters for availing refinance facilities under the Export Finance Scheme, their maximum margin / spread does not exceed 1.0% p.a. The final rate of EFS to the borrowers shall, therefore, not exceed 7.50% p.a. (SBP refinance rate 6.50% p.a. +1.0% p.a. spread of the banks) as against prevailing rate of 9% p.a.

3. The above arrangements are on temporary basis and the practice of review and fixation of rate on monthly basis shall be continued and change in the rate, if any, shall be made accordingly.

4. The financing facilities under Part-B (Export Sales) of the Scheme for financing Locally Manufactured Machinery shall also attract similar mark up rate structure.

5. Banks are advised to perform enhanced due diligence while granting loans under EFS to eligible borrowers to avoid its misuse. Any violation or circumvention of the instructions would attract penal action under relevant provisions of BCO, 1962.

6. Other instructions on the subject shall remain unchanged.

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