The Presidents/CEOs,
All Banks / DFIs /MFBs

Dear Sirs/Madams,

Fiscal Relief to Rehabilitate the Economic Life in Khyber Pakhtunkhwa,
FATA and PATA - Payment of mark-up rate subsidy on business loans
for the period from 01-01-2010 to 30-06-2010 -Textile Sector

Please refer to SMEFD Circular No. 11 dated July 01, 2010 regarding the captioned subject.

2.   In this connection it is advised that Federal Government has included the entire Textile Sector of Khyber Pakhtunkhwa also in Prime Minister’s Fiscal Relief Package for FATA/PATA/ Khyber Pakhtunkhwa. Further, Ministry of Finance, Government of Pakistan has also released budgetary allocation for payment of mark up rate differential on the existing loans of the entire Textile Sector of Khyber Pakhtunkhwa under said Package.

3.   However, two packages viz. Khyber Pakhtunkhwa Package and the National Textile Policy Package will run concurrently providing the option to the entire value chain of textiles in Khyber Pakhtunkhwa to select one package to the exclusion of the other. On the expiry of Khyber Pakhtunkhwa Package after two years the entire value chain of textiles in Khyber Pakhtunkhwa will avail the benefit of the National Textile Policy for a further period of two years as provided in the National Textile Policy.

4.   As above Relief Package is applicable from January 01, 2010, therefore, the exporters / borrowers of Textile Sector who have already availed 2.5% Export Finance Mark up Rate Facility and/or 5% Mark up Rate Support against Long Term Loans for six months period ending on February 28, 2010, in terms of SMEFD Circular Nos. 03 & 04 of 2010, will be required to adjust the amount of said subsidies for two months from 01-01-2010 to 28-02-2010 to avail mark up rate subsidy under above Relief Package. Further, banks/DFIs should ensure that benefits under above Packages are not availed in duplication.

5.   Keeping in view the above terms & conditions, banks / DFIs may calculate mark up rate differential on outstanding loans of Textile Sector, in the light of instructions contained in SMEFD Circular No. 11 dated July 01, 2010 and submit duly completed claims at SBP-BSC (Bank), Peshawar for reimbursement of mark up rate differential for the period from 01-01-2010 to 30-06-2010 as per attached revised Claim Form, latest by September 30, 2010.

                Other instructions on the subject shall remain unchanged.