Please
refer to the Scheme for Long Term Financing for the Export
Oriented Projects (LTF-EOP) circulated vide BPD Circular
No.14 dated 18th May 2004 read with SMED Circular No.
15 dated July 14, 2006 and other instructions issued from
time to time.
2.
In order to facilitate the export oriented industry to
overcome the prevailing crises and to remain competitive
in the world market, it has been decided to allow a one
time opportunity to the Textile Sector to refinance their
outstanding fixed term loans availed from banks/DFIs for
import of plant & machinery with loans under SBP’s
LTF-EOP Scheme as per the following parameters:-
i)
Only those fixed term loans of Textile Sector will be
eligible for refinance, under the LTF-EOP Scheme, which
have been obtained on or after 01-01-2003. No loan disbursed
prior to the 01-01-2003 shall be refinanced under the
subject Scheme.
ii) Textile Sector will not include spinning units. However,
only six processes/sub-sectors of spinning sector viz.
doubling, twisting, combing, slubbing, lycra & yarn
dyeing exclusively will be eligible.
iii) The outstanding principal amount on the date of granting
of refinance shall be eligible for refinance under LTF-EOP
Scheme at the markup rate prevailing at the time of availment
of refinance from SBP BSC Offices. The rate of mark up
(revised rate of mark up) shall be applicable prospectively
and not with retrospective effect i.e. from the date of
availment of refinance under the LTF-EOP Scheme.
iv)
The refinance so provided under LTF-EOP Scheme will be
subject to the terms & conditions laid down in the
scheme.
v) Refinance to banks/DFIs shall be provided only to the
extent of outstanding principal amount at the time of
grant of refinance on the basis of certification by bank’s/DFI’s
Internal Audit with regard to outstanding principal and
confirmation that the refinanced loan is within the terms
and conditions laid down in the SBP LTF-EOP Scheme. A
copy of the said Internal Audit Certificate shall also
be submitted to the concerned office of SBP BSC (Bank)
at the time of availing the refinance facility.
(For example, if a bank has disbursed Rs.100 million to
a borrower on or after 01-01-2003 for import of machinery
and the borrower has already repaid Rs.25 million (principal
amount) to the bank, as per the original repayment schedule,
then the bank can avail refinance only to the extent of
Rs.75 million under the Scheme (i.e. the principal amount
of loan outstanding on the date of availing refinance
from SBP).
vi) No refinance shall be allowed to non-performing loans
(NPLs) classified under SBP Prudential Regulations.
vii) The banks/DFIs shall adhere to the repayment schedule
already agreed at the time of sanction / disbursement
of the original loan. The banks/DFIs may, however, at
their sole discretion consider any rescheduling / restructuring
as per their own credit policies, but in such case, the
repayment period of loans shall not exceed 7 ½
years from the date of first disbursement made by the
banks/DFIs under the original loan. However, in case bank/DFI
has allowed the financing facility for a shorter period
(less than 7 ½ years), the same period of repayment
shall be adhered to accordingly under the refinancing.
viii) The borrowers desiring to obtain refinance under
the arrangements, while applying to the concerned bank/DFI,
shall also submit a report from PBA’s approved surveyors
(acceptable to bank/DFI) with regard to confirmation of
machinery strictly with the criteria as laid down in SBP
LTF-EOP Scheme.
ix) Refinance shall be allowed to the banks/DFIs by the
concerned office(s) of SBP BSC (Bank) only on submission
of documents prescribed against the limits sanctioned
by SBP in their favour under the scheme.
x) In case of consortium arrangements, refinance shall
be allowed to financing banks/DFIs individually on submission
of requisite documents alongwith a certificate (in original)
from the lead bank/DFI regarding their share in the consortium.
xi) Refinance shall be allowed on the rate of service
charges (mark up) applicable on the date of actual disbursement
of the refinance amount to the concerned bank/DFI by the
SBP BSC Office.
xii) The refinance obtained 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(ies)/ delinquency(ies) pointed
by BID shall be subject to penal action, as per provisions
of Banking Companies Ordinance.
xiii) Banks /DFIs shall be required to report full details
of loans refinanced to the SME Department, SBP, on monthly
basis on the annexed format.
3.
Refinance facility under above arrangements shall be a
one-time opportunity effective from the date of issuance
of the circular and will remain valid only up to 31-12-2006.
4. Other instructions on the subject shall remain unchanged.
Encl:
As above