This refers to a letter of Mr S.M.A. Rizvi, published in your esteemed daily on October 12, 2008 under the caption: "Open letter to SBP Governor" which creates an impression that the SBP has not been allowing R&D support to the exporters despite a decision made by the Government in this regard. The impression is not factually correct.
It is clarified that the role of the State Bank in administering the R&D support scheme is only to make payments to the eligible exporters of garments, textile made-ups including bed- ware and linen, fabrics (dyed and bleached), leather and footwear against their claims provided they are in compliance with the covenants of the SRO issued by the concerned ministry and that the Ministry of Finance has provided necessary budgetary allocation authorising the State Bank to debit their account.
Mr Rizvi in his letter has also criticised the decision of the State Bank to discontinue receipt of the R&D support cases effective 25th June, 2008. As already stated that the R&D support is released by the State Bank by debit to the Government account against budgetary allocations communicated to it (SBP) by the Ministry of Finance in April 2008. Since all cases that were to be received by SBP between 26th to 30th June 2008 would have matured for payment in FY09 for which no budgetary allocation was provided to SBP by the Ministry of Finance, the cut-off date of 25th June, 2008 was fixed in collaboration with the Finance Division.
We would like to place it on record that all claims, complete in all respect, received up to 25th June, 2008 were settled before the close of FY08 in accordance with the guidelines and the budgetary allocations conveyed by the Government to SBP.
It may be pointed out that the SBP, since the announcement of the R&D support scheme in 2005, has scrutinised more than 3,99,000 claims and provided Rs 40 billion against approximately 3,50,000 claims that were found in order.
As regards the recent decision to allow the R&D support on the basis of the shipments made up to 30th June, 2008, all stakeholders are well aware that the R&D Support scheme operates on the basis of the proceeds realisation rather than the shipment date. Accordingly, the Central Bank in a series of correspondence with the Government has observed that unless the relevant SROs on the issue are modified to make the scheme applicable on the basis of shipment rather than the proceeds realisation and the budgetary allocation for the FY09 is intimated to it, the State Bank will not be in a position to release the R&D support to the banks against requests received from the eligible exporters.
Further, the Governor and other SBP officials have always accorded priority to facilitate the exporters and address their concerns. In this regard they frequently meet and consult the stakeholders and Help Desks have been established at SBP for exporters as well as public at large to lodge complaints regarding their grievances against banks/DFIs. We hope that this response would set the matter in its right perspective.
(The writer is chief spokesman, State Bank of Pakistan.)