Effective
September 1, 2009 the Government of Pakistan has announced
a Mark up Rate Support for Textile Sector on their outstanding
running balances of principal amount of floating rate
loans availed by the industry from commercial banks/DFIs
for financing import / purchase of textile machinery
vide Notification No. 3(3)TID/09-P-I dated 1st September
2009 of Ministry of Textile Industry (MINTEX) (copy
enclosed).
2.
Pursuant to the release of budgetary allocation by the
Ministry of Finance for payment of above Support for
six months ending on 28th February, 2010, following
procedure has been devised in consultation with Ministry
of Textile Industry, for payment of Mark up Rate Support
for Textile Sector to the eligible borrowers of Textile
Sector:-
(i)
Maximum Support will be admissible to the extent of
5% p.a. or the difference in mark-up rate between
floating rate loan and LTFF rate, whichever is lower.
(ii) The amount of Support shall be paid by
the commercial banks/DFIs to the eligible borrowers
at their respective branches, provided the borrowers
have on-line Registration Certificate issued by Ministry
of Textile Industry during the validity of the same.
(iii) The Support shall be admissible on the principal
amount of loans outstanding on reducing balance on
daily product basis.
(iv) The loans disbursed by the banks/DFIs up-to August
31, 2009 shall qualify for the facility.
(v) The Support shall be admissible against long term
loans extended for import / local purchase of textile
machinery only against import/inland letter of credit
(LC).
(vi) The outstanding loans in respect of locally manufactured
and imported machinery for which borrowers have availed
financing facilities under SBP’s Long Term Financing
Facility (LTFF) will not be eligible for this facility.
(vii) No Support shall be admissible on the amount
of loan disbursed for meeting import incidentals.
The Support shall be admissible only on the outstanding
principal amount of loans availed on the C&F value
of the imported machinery and / or ex-factory /show
room price of locally manufactured machinery.
(viii) This facility will be administered by the commercial
banks/DFIs.
(ix) Amount of Support shall be paid by commercial
banks/DFIs on six monthly basis in March and September
each year subject to release of necessary budgetary
allocation by the Federal Government for relevant
fiscal year.
(x) Accordingly, Support for six months ending
on 28th February 2010 (from 01-09-2009 to 28-02-2010)
shall be from the date of issuance of this circular
up-to April 23, 2010. However, final dates for payment
of Support in the next period shall be announced separately
on receipt of budgetary allocations from Government
of Pakistan for the respective periods.
(xi) For the calculation of Support payable in the
month of March-April 2010, the amount outstanding
as on 31st August 2009 shall be used
as base figure and amount of Support shall be calculated
on reducing balance basis for all scheduled repayments
by the borrowers during six months period.
(xii) The facility shall not be available to the borrowers
having non-performing loans, classified under SBP
Prudential Regulations. However, banks/DFIs can allow
the facility after rescheduling/restructuring of such
loans.
(xiii) The banks/DFIs shall pay the Support
to the eligible borrowers to the extent of 70% of
total amount worked out for six months period from
01-09-2009 to 28-02-2010. The remaining amount of
subsidy will be provided upon receipt of funds from
Ministry of Finance as and when received.
3.
After making payments of Support, the disbursing branch
of banks/DFIs can seek its reimbursement from the concerned
offices of the SBP-BSC as per these guidelines and on
submission of application, certified by the Compliance
or Internal Audit, as per the format attached to this
circular.
4. Each application will invariably be accompanied
with a duly attested copy of Ministry of Textile Industry
Registration Certificate as mentioned above. The said
registration certificate shall be attested jointly by
the branch manager and concerned officer of the branch
after seeing the original one. It must be noted that
claims will only be accepted within the validity period
of such Certificates.
5.
Applications duly completed in all respects shall be
processed by the offices of SBP-BSC subject to the condition
that documents as mentioned in Application Form have
been enclosed with the applications, which shall be
subject to subsequent detailed scrutiny. In case SBP
or its authorized representatives subsequently conclude
that the Support was availed on the basis of incomplete
/ incorrect information, or that the same was claimed
wrongfully, the amount of Support so paid shall be recovered
by debit to the account of the bank/DFI concerned. On
removing the irregularities to the satisfaction of the
concerned office the Support shall be reinstated. However
no benefit whatsoever shall accrue to the bank/DFI or
the borrower for the period, the Support was discontinued.
In case the disbursing banks/DFIs fails to remove the
objection raised by SBP or its representatives within
30 days the case will be treated as closed. No claim
for six months ending on 28th February 2010 of Mark
up Rate Support shall be entertained after April
23, 2010. Banks/DFIs are, therefore, advised
to ensure that all eligible cases are submitted by their
concerned branches to the respective offices of SBP BSC (Bank) as per schedule.
6.
State Bank shall not accept liability of whatsoever
nature where a bank/DFI has failed to submit its request
for payment of Support within the validity of the Scheme,
regardless of the fact that delay in submission of fresh
request or re-submission of request for payment of Support
pursuant to action taken in terms of Para 3 above was
on account of the inability of the bank/DFI or the beneficiary
of the Support i.e. borrower.
7.
No service charges, fee etc. of whatsoever nature shall
be recovered by the bank / DFI from the borrower(s)
for processing of these claims.
8.
Banks / DFIs are advised to properly and promptly circulate
these instructions to their branches and constituents
for meticulous compliance.
Copy Enclosed
Encl: As above