The State Bank of Pakistan has announced to continue current limits of Long Term Financing Facility (LTFF), Export Finance Scheme (EFS) and Islamic Export Refinance Scheme (IERS) till finalisation of new limits.
According to SBP, LTFF limits sanctioned in favour of banks for the year 2011-12 are due to expire on 30-06-2012, therefore in order to ensure that financing facilities are available to borrowers till finalisation of new limits under the facility for the financial year 2012-13, it has been decided to continue with the existing limit until fresh limits for FY 2012-13 are notified.
SBP, in its I H & SMEFD Circular letter No 8 issued on Friday, has also advised banks to provide limit requirements for FY 2012-13 under LTFF and borrower-wise details of cases being sanctioned, application(s) in process/pipeline under the facility alongwith details of LCs established and their expected date of retirement.
This information should be furnished latest by June 29, to enable us to finalise new limit under the facility for FY 2012-13, it added. In an other circular No 7, the SBP said that current limits of export refinance limits sanctioned in favour of banks for the year 2011-12 are due to expire on 30-06-2012. Under the present system, exporters are required to submit EE-1 statement for the year 2011-12 duly verified by Foreign Exchange Operations Department latest by August 31. 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 year 2012-13.
Therefore, in order to ensure that the financing facilities are available to exporters till finalisation of their new limits under Part-II of scheme, it has been decided that limits sanctioned by banks to individual exporters under Part-II of the scheme for 2011-12 will continue up to August 31, 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.
In addition, the facility under Part-II is self regulating and exporters should be able to evaluate correctly their export earnings during FY 2011-12, work out their own estimates as to the quantum of their entitlement for the year 2012-13 and should accordingly adjust their existing borrowings on or before end June 2012 to avoid utilisation of excess facilities under the scheme during the period of roll over which would be subject to non refundable fine.
SBP said that requests of banks for limits under the Export Finance Scheme and Islamic Export Refinance Scheme for the year 2012-13 may be submitted to this SBP separately up to June 29, to enable us to finalise limits for the year 2012-13. Banks are, therefore, advised by SBP to clearly intimate contents of sub Para a & b above to their borrowers availing facilities under Part-II of the Scheme for compliance.
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