In pursuance of State Bank of Pakistan’s (SBP) strategy to promote the use of digital channels to enhance operational efficiency and improve ease of doing business, the functions of Export Finance Scheme (EFS)/Islamic Export Refinance Scheme (IERS) have been digitized and centralized at SBP BSC Karachi. A new operational mechanism has been developed on SBP's online Knowledge Management (KM) Portal-Regulatory Approval System (RAS) in consultation with banks, which will serve as an online platform for transmission of EFS related information/ data between SBP BSC and banks. Necessary trainings have already been provided to the banks’ relevant officers on new operational mechanism and KM portal - RAS along with users’ testing.
2. Effective February 01, 2022, banks shall submit various EFS/IERS Part-I/II-related information through KM Portal-RAS. This mechanism will run in parallel of existing manual process for next 04 Weeks. During parallel run, banks will submit hard copies of documents to respective SBP BSC offices along with digitized format via KM-RAS and loans will be processed by SBP BSC through digitized mechanism. Meanwhile banks shall align their systems with the revised operational mechanism. Banks shall also strengthen their internal controls for processing of EFS/IERS cases to avoid operational/reputational/legal or any other risk. Further, some of the functions, which are currently being performed by SBP BSC offices, have also been delegated to the banks. The details of revised mechanism are as under:
I. Centralized reporting mechanism by banks:
Banks having limits under EFS/IERS shall designate central reporting units (CRU) in their offices for reporting of information / data through KM portal - Regulatory Approval System (RAS) to SBP BSC Karachi. The portal shall be exclusively used for communication and data transmission between the banks and SBP BSC Karachi.
II. Sub-allocation of banks limits under EFS/IERS:
Annual limits allocated and communicated to the banks under EFS/IERS shall be sub-allocated by the concerned bank among their respective regions as per their requirement. SBP BSC Karachi shall only monitor the overall limit of an individual bank.
III. Assignment of unique exporter's ID/code:
For processing and monitoring purpose, each exporter shall be assigned a unique ID/code, which will be communicated by SBP BSC Karachi to all banks' CRUs. In case of new exporter, CRU of the bank shall intimate to SBP BSC Karachi for creation of unique exporter ID.
IV. Financing to borrowers:
Dealing branches of commercial banks shall provide finance to exporters across Pakistan after collection of necessary documents and due diligence as per existing instructions of the scheme against eligible products excluding those mentioned in the Negative List issued vide SBP circulars from time to time basis. Subsequently, CRU of concerned bank shall report to SBP BSC Karachi for reimbursement after financing to the exporter.
V. Recovery of principal and markup:
SBP BSC Karachi shall recover principal and markup on loans disbursed under EFS on due date as per existing system. In case of IERS, CRU shall provide total amount of SBP's share of quarterly profit to SBP BSC Karachi within stipulated time. Further, in case of early or partial payment by exporter (s), CRU of concerned bank shall pass on the principal amount along with applicable markup to SBP BSC Karachi within prescribed time.
3. CRUs of banks shall upload consolidated CSV file (preferably one file per day against each category) on KM portal-RAS as per nature of the activity/transaction under EFS / IERS part-I/II (i.e. refinance claim, shipment details, repayment of loans, exports overdue position, exporter limits, charging of fines details, exporter performance, export proceeds realization details etc.) through prescribed formats latest by 3:00 pm on daily basis. The process of submission of information under EFS/IERS Part I /II is as under:
I. Submission of information/data through online KM portal-RAS under EFS/IERS Part-I:
Submission of consolidated file supported by individual borrower’s position:
Separate consolidated file shall be used for each type of activity (i.e. claim of refinance, exports overdue certificate, proof of shipment, export proceeds realization etc.) in prescribed CSV file, daily before cut-off time. Banks shall develop/align their systems with SBP KM portal so that refinance is claimed on the same day of financing made to borrower.
Disbursement of refinance by SBP BSC Karachi:
After scrutiny of data uploaded by CRU, SBP BSC Karachi will disburse the refinance amount to concerned bank on loan wise basis, if all the loan cases are found in order. In case of any discrepancy, SBP BSC Karachi will return the relevant case(s) to concerned bank for rectification while making payment for rest of the cases.
Monitoring of EFS cases and charging of penalty:
Banks are required to monitor shipment against each loan case and report the consolidated position to SBP BSC Karachi through their respective CRUs on due date. In case of short/non/delayed/irregular shipment, late submission of shipping documents, late/non submission of EPRC, late/less adjustment of export proceeds, and any other defaults under EFS Part-I, concerned bank will charge penalty at prescribed rate as mentioned in SBP circulars issued from time to time basis and pass on the same to SBP BSC Karachi on the same day. In case of subsequent refund of fine on account of any category, CRU will upload the request with relevant information to SBP BSC Karachi. However, banks can also allow substitution, where required as per relevant instructions.
II. Submission of information/data through online KM portal-RAS under EFS/IERS Part-II:
Availing refinance limit and reporting of export performance:
After getting verified EE-1 statement (for entitlement of limit) and EF-1 statement (for matching export performance), CRU of concerned bank will lodge a request to SBP BSC Karachi for allocation of annual refinance limit (as per EE-1 statement)/matching of export performance against last year borrowing (as per EF- 1 statement) as the case may be of the concerned exporter.
Monitoring and Consolidation of exporter’s entitlement of limit/ export performance:
SBP BSC Karachi will scrutinize the entries of EE-1 statements/ EF-1 statement of individual exporter and consolidate entitlement of limit/export performance submitted by all banks. Accordingly, SBP BSC will intimate the refinance limit/export performance to concerned bank (s) with advice as per existing instructions before charging of penalty on account of availing excess finance/short/nonperformance by any exporter. In case of transfer of exporter’s limit from one bank to another bank, CRU of concerned bank will report the request to SBP BSC.
Roll-over of financing:
After allowing rollover as per terms and meeting required shipment conditions, CRU will report consolidated information along with shipment details of individual exporter to SBP BSC Karachi for claiming refinance.
Claim of performance based Mark-up Rebate:
CRU will lodge claims for performance based markup rebates to SBP BSC Karachi. After scrutiny of the case and consolidation of total performance, SBP BSC Karachi will disburse the rebate amount to concerned bank(s).
4. After successful parallel implementation of digitized operational mechanism, banks will have to submit only hardcopies of agreement and Demand Promissory Note once in a year or in case of enhancement of allocated limit, for covering their respective annual allocated limit under EFS/IERS to SBP BSC. However, record of all other documents of all EFS/IERS cases needs to be maintained at respective branches of banks to be readily available for subsequent on-site verification/inspection by SBPBSC/SBP.
5. With effect from February 01, 2022, all information/data related to new loans and roll-over under EFS/IERS Part I/II shall be submitted though KM Portal - RAS in line with revised operations mechanism. However, EFS loans outstanding as on 31st January 2022 will be processed as per existing mechanism till their maturity.
6. The cases submitted with incomplete documents or without following the procedure described in circular shall not be attended and shall be returned to the respective PFI. In case of non-compliance of SBP instructions, the punitive / necessary action will be taken, accordingly.
7. In case of any query related to digitized mechanism, Banks may email their queries to [email protected].
8. Detailed user guide is attached at Annexure-A.
9. Other instructions on the subject schemes shall remain unchanged.
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Encl: As above