Circulars/Notifications / Infrastructure, Housing & SME Finance Department  

 IH&SMEFD Circular Letter No. 20 of 2020
July 08, 2020

The Presidents/ CEOs,
All Banks/DFIs.

Dear Sirs/Madams,

1. Temporary Economic Refinance Facility (TERF)
2. Islamic Temporary Economic Refinance Facility (ITERF)

      Please refer to IH & SMEFD Circular Nos. 01 and 02 of 2020 dated March 17, 2020, read with IH & SMEFD Circular Letter No. 09 of 2020 on the captioned subject.

2.    In order to further facilitate the business community to promote long term investment, State Bank of Pakistan has taken the following decisions with immediate effect:

  1. The end user mark-up rate under Temporary Economic Refinance Facility (TERF) has been reduced from 7% p.a. to 5% p.a., with SBP refinance rate at 1% and banks’ maximum spread of 4%.

  2. Letters of Credit (LCs)/ Inland Letters of Credit (ILCs) established prior to issuance of the scheme but retired/to be retired after March 17, 2020 will also be eligible for refinance

3.    All other terms and conditions of the Facilities shall remain unchanged.

Yours sincerely,


(Dr. Mian Farooq Haq)


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