The State Bank of Pakistan, while asking the banks for new limits under Export Finance Scheme (EFS) for the next fiscal year, has extended the present limits of EFS for one month. Banks have been advised by the central bank to submit, by June 25, 2009, their requests for new limits for 2009-10.
The SBP in its SMEFD Circular letter No 08, issued on Saturday, said that export refinance limits, sanctioned in favour of banks for the year 2008-09, are due to expire on June 30, 2009. The circular said that under the present system, exporters are required to submit EE-1 statement for the year 2008-09 duly verified by SBP Foreign Exchange Operations Department latest by August 31, 2009.
Banks would, therefore, not be in a position to work out revised entitlement of limits for each exporter under Part-II of the Scheme for the fiscal year 2009-10. In order to ensure that the financing facilities are available to exporters till finalisation of their new limits under Part-II of Scheme, SBP has decided to extend the limits.
"Limits sanctioned by banks to individual exporters under Part-II of the Scheme for 2008-09 shall continue up to August 31, 2009, to enable exporters to avail financing facilities under the Scheme pending preparation of EE-1 statements, their verification by the Foreign Exchange Operations Department, SBP-BSC and submission of the same to the Refinance Units of the concerned office of SBP-BSC," the SBP announced.
The facility under Part-II is self-regulating and exporters should be able to evaluate correctly their export earnings during 2008-09, work out their own estimates as to the quantum of their entitlement for the year 2009-10 and should accordingly adjust their existing borrowings on or before end-June 2009 to avoid utilisation of excess facilities under the Scheme during the period of roll-over which would be subject to non-refundable fine.
In addition, requests from banks for limits under the Export Finance Scheme and Islamic Export Refinance Scheme for the year 2009-10 may be submitted separately up to June 25, 2009 to enable us to finalise limits for the year 2009-10, the circular said.
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