President of Multan Chamber of Commerce & Industry (MCCI) Anis Ahmed Sheikh has hailed the decision of State Bank of Pakistan (SBP) to allow financing for the import of second hand plant and machinery to be used in the eligible sectors/sub-sectors of LTFF Scheme.
In a press statement, Anis Ahmed Sheikh said that SBP had taken a right step on appropriate time, which would help in developing the industrial sector. The SBP has advised banks and DFIs to allow financing for the import of second hand plant and machinery to be used in the eligible sectors/sub-sectors of LTFF Scheme.
The central bank said that the financing would be subjected to the following conditions: Only imported second hand machinery not more than three years old will qualify for financing under the scheme. Second hand machinery purchased from local suppliers will not qualify under the scheme. Further, fixed term loans extended by banks/DFIs against second hand imported machinery prior to the issuance of this circular will not be eligible for refinance.
The useful life of such machinery should be more than the period of loan itself. The borrowers concerned should submit a report from PBAs approved surveyors (acceptable to bank/DFI concerned) with regard to confirmation that machinery is in order and its useful life is more than the period of loan itself.
Banks/DFIs can avail refinance for a maximum period of three years, to the extent of value of such machinery determined by the approved surveyor or original cost less accumulated depreciation @ 10 percent p.a., whichever is lower. LCs established from the date of this circular to December 31, 2009 shall be eligible for refinancing from SBP.
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