Please refer to Long Term Financing Facility (LTFF Scheme) circulated vide MFD Circular No. 07 dated December 31, 2007 and other instructions issued from time to time in the matter.

2. In order to facilitate the export oriented industries 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 exporters (excluding Textile & Garments) to refinance their outstanding long term loans availed from banks/DFIs for import/purchase of plant & machinery with loans under SBP’s LTFF Scheme as per the following parameters:-

i) Only those long term loans will be eligible for refinance under the LTFF Scheme which has been disbursed by the banks / DFIs during the period from 01-01-2005 to 31-03-2009 to the exporters of eligible Sectors/Sub-Sectors mentioned in Schedule 1 of Scheme excluding Textile & Garments. No loan disbursed prior to the 01-01-2005 shall be refinanced under these arrangements.

ii) Exporters of Textile & Garments Sector will not be eligible for refinance under these arrangements. They will, however, continue to be entitled for fresh financing under LTFF Scheme provided their industry is covered in the list of eligible sectors / sub sectors of the Scheme.

iii) Refinance to banks/DFIs shall be provided only to the extent of 50% of outstanding principal amount at the time of grant of refinance. Remaining 50% shall continue to be financed by the banks/DFIs from their own sources as per original terms & conditions of respective lending institutions.

iv) Refinance under the arrangements shall be provided at the markup rate prevailing at the time of availment of refinance from the offices of SBP-BSC under LTFF Scheme. The rate of mark-up shall be applicable from the date of availment of refinance under the LTFF Scheme.

v) The refinance so provided under LTFF Scheme will be subject to the terms & conditions laid down in the scheme.

vi) Refinance shall be provided 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 LTFF 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.

vii) No refinance shall be allowed to non-performing loans (NPLs) classified under SBP Prudential Regulations.

viii) The banks/DFIs shall prepare the repayment schedule for refinanced portion (principal amount only) in line with the repayment schedule already agreed at the time of sanction / disbursement of the original loan. They may, however, amend the repayment schedule in a way that the borrowers can make repayments in equal quarterly or half yearly installments as mentioned in LTFF Scheme, however, total tenor of loan shall remain the same.

ix) In case the borrowers repay their obligation in part or in full on or before due date(s) the banks/DFIs shall adjust the loan amount on prorata basis keeping in view the share of financing made by them through their own sources and refinance availed from SBP. They shall repay SBP’s portion of loan amount so received from the borrower immediately, but not later than two working days, to the concerned office of SBP BSC, failing which fine for late adjustment will be charged from the PFI at the rates prescribed in the Scheme.

x) 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 LTFF Scheme.

xi) Refinance shall be allowed to the banks/DFIs by the concerned offices of SBP BSC (Bank) only on submission of documents prescribed against the limits sanctioned by SBP in their favour under the scheme.

xii) In case of consortium arrangements, refinance shall be allowed to financing banks/DFIs individually on submission of requisite documents along-with a certificate (in original) from the lead bank/DFI regarding their share in the consortium.

xiii) 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/ delinquency pointed out by BID shall be subject to penal action, as per provisions of Banking Companies Ordinance.

3. Refinance facility under above arrangements shall be a one-time opportunity effective from the date of issuance of this circular and will remain valid only up to 30th June 2009.

4. Other instructions on the subject shall remain unchanged.