On
the representation of industry associations, it has been
decided to allow banks / DFIs to provide grace period
to their deserving borrowers having availed financing
under Long Term Financing for Export Oriented Projects
(LTF-EOP) including Debt Swap Facility under LTF-EOP Scheme
and Long Term Financing Facility (LTFF) Scheme. Accordingly,
banks/DFIs may wish to provide deferment of one year in
repayment of principal outstanding under the above schemes
as of 31st December, 2008. Under this facility the repayment
dates for all installments of principal amounts falling
due during the period from 1st January to 31st December
2009 may be re-fixed after a period of one year from the
respective due date.
2)
For this purpose, banks/DFIs shall carry out their due
diligence of the individual borrowers on case to case
basis. The requests for availing the subject facility
from eligible borrowers shall be considered by banks/DFIs
as per following criteria:-
a)
Banks/DFIs shall take into account the track record, conduct
of account, underlying collateral, financial condition
and future outlook, volume of exports and overall risk
profile of the borrowers in evaluating their requests
for availing this facility.
b)
In case the banks/DFIs are satisfied with the borrower
and the underlying credit risk is acceptable to them,
they can provide the grace period of one year under
this facility.
c)
In case a loan has already been rescheduled by a bank/DFI
as per its policy or in case a borrower has defaulted
in repayment of installment(s) fallen due, as per original
repayment schedule, and/or payment of mark-up on due
dates, such cases would not be eligible for the benefit
under these instructions.
d)
The concerned bank/DFI will also evaluate the general
behavior of the borrowers concerned in all other financing
facilities extended to them by the bank/DFI. No benefit
under this circular should be given to the borrowers
having non-performing loans, classified under SBP Prudential
Regulations.
e)
While preparing revised repayment schedule banks/DFIs
will adhere to the original terms of repayment schedule
already agreed at the time of grant of refinance (i.e.
the original grace period & principal amount of
installments shall remain the same and only dates of
repayment will be changed). The Offices shall, however,
check the accuracy of such revised repayment schedules
as per their record to ensure that no grace period is
granted for a period exceeding one year.
f)
The borrowers who have already repaid LTF-EOP/LTFF loans
shall not be eligible for reimbursement of the same.
Similarly in case a loan is not payable during 2009
as per its original repayment schedule, it shall not
qualify for the benefit under these arrangements. Only
loans outstanding as of 31st December, 2008 shall qualify
for the benefit of grace period. As such, the loans
disbursed on or after January 1, 2009 shall not qualify
for said benefit.
3)
The borrowers interested in availing the benefit under
this circular shall approach to the concerned banks/DFIs
which shall process their requests in line with parameters
prescribed in Para 2 above and as per their respective
policies.
4)
In case of consortium financing, Head Offices of member
banks/DFIs will forward their recommendations to lead
bank/DFI for final approval.
5)
The concerned office of SBP BSC (Bank) will also adjust
repayment of its refinance accordingly from the concerned
banks/DFIs only in respect of such borrowers to whom grace
period facility shall be granted by the financing banks/DFIs
or a lead bank/DFI, in case of consortium financing.
6)
After approval from Head Office the concerned branches
of banks/DFIs shall approach the concerned offices of
SBP-BSC along-with copies of revised repayment schedules
to defer the principal amount of installments for one
year.
7)
The banks/DFIs shall keep on record the basis for grant
of said benefit to the borrowers concerned which 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 out by BID shall be subject to
penal action, as per provisions of Banking Companies Ordinance.
Any penalty levied in this context shall not be passed
on to the borrowers concerned.
8)
This is a one-time facility effective from the date of
issuance of the circular and will remain valid only up
to March 31, 2009. Any request received after March 31,
2009 shall not be considered by banks/DFIs.
Banks
/DFIs are advised to circulate these instructions to their
branches and constituents for meticulous compliance.
Please
acknowledge receipt.