The State Bank of Pakistan on Monday introduced performance-based lower mark-up rates for exporters under Export Finance Scheme (EFS) Part II with a view to further incentivise exporters who are performing well so that they remain competitive in the international market. Earlier, the SBP was providing financing to exporters on single mark-up rate--7.5 percent--under the EFS part II.
However, to provide more relief to exporters who are performing better than others, SBP has announced to provide relief in terms of mark-up. Sources said that EFS Part II was already performance base, but only those exporters were eligible who had achieved performance requirement of 2.00 times. However, there was no benefit for those exporters who had performed over 2 times. Therefore, SBP has now announced new performance base slabs of mark-up under EFS part II.
According to a circular issued by the State Bank, exporters who have achieved performance requirement of 2.00 to 3.00 times will continue to get financing at 7.5 percent, which is a standard EFS Rate. However, exporters who have achieved performance requirement of 3.01 times to 4.00 times will avail 0.5 percent relief on mark-up, and get financing at 7.0 percent.
In addition, exporters having 4.01 to 5.00 times export performance would get 1 percent discount and will avail financing at 6.5 percent, and above 5.0 times will get financing at 6.0 percent under EFS Part-II. "The exporters who have achieved excess performance, as mentioned above, will claim benefit of mark-up rate differential from SBP through their bank, provided they have no export proceeds overdue bills," the circular said.
The benefit in mark-up rate will be reimbursed to exporters through their banks on submission of a claim form to respective offices of SBP-BSC, after verification of export performance as per EF-1 statement(s) by Foreign Exchange Operation Department at the end of each financial year, the circular added.
Sources said that at present some Rs 120 billion is pending under the EFS part II scheme, and SBP is providing financing to banks at 6.5 percent and with 1 percent margin banks are providing financing at 7.5 percent mark-up rate.