Deputy Governor (DG), State Bank of Pakistan (SBP), Muhammad Kamran Shehzad has said that the refinance limit of over Rs 228 billion has been assigned under the Export Finance Scheme (EFS) to various banks for the current fiscal year 2009-10, which is about 28 percent higher than last year.
He said this while addressing the members of Faisalabad Chamber of Commerce and Industry (FCCI) and Pakistan Textile Exporters Association (PTEA), All Pakistan Cotton Powerlooms Association (APCPA) here on Wednesday. He said that SBP is continuously monitoring the availability of credit to export sector so that exporters do not suffer on account of lack of funds.
Deputy Governor said that the export oriented projects of powerlooms or weaving sub-sector can avail the financing facilities under long-term financing facility (LTFF) scheme to meet the credit needs of the export oriented projects. Referring to various demands of FCCI, Kamran Shehzad said that SBP inspection teams did check whether the bank charges/fees to the customers are according to their own schedule of charges.
We would like to encourage the bank customers to act in a rationale way and should shop around and look for optimum solution which suits their business requirements, he added.
In response to another demand of FCCI, the SBP Deputy Governor said that Forward Cover against imports has been temporarily suspended. The same will be considered or reviewed once the market conditions and other factors are improved, he added.
Later, addressing the members of Pakistan Textile Exporters Association (PTEA) and other textile value-added organisations, Kamran Shehzad said that the real lending rate in Pakistan is only 0.4 per cent compared to 9.5 per cent in Indonesia, 7.6 per cent each in Sri Lanka and Bangladesh, 4.2 per cent in Malaysia and 0.8 per cent in India, he added.
He said that the SBP also takes appropriate measures to keep the exchange rate of the rupee at an appropriate level and prevent it from wide fluctuation in order to maintain competitiveness of our exports and stability in the foreign exchange market.
The stability of exchange rate at an appropriate level also in maintaining a stable balance of payment position, he added. Referring to PTEA concern over banking spread, Deputy Governor said that SBP has been advising banks to keep lower their spread through moral suasion. However, the customers are free to choose an institution having a lower spread on loans, he added.
Referring to the demand of PTEA to enhance the refinance limit by Rs 50 billion, Kamran Shehzad disclosed that banks, up till March 6, 2010 have utilised Rs 190.2 billion out of the sanctioned limits of Rs 228.3 billion. He said that Rs 38.1 billion in refinance limit is still available with banks.
Therefore, we understand that there is no issue of limits under the EFS, he added. He assured the textile exporters that their complaints against excess charging of insurance premium by banks would be looked into the State Bank's inspection teams in their forthcoming inspection. However, he said if any exporter has specific complaint, then he should file a complaint with Customer Protection Department of SBP for its redrressal. We assure you a prompt response on such irregularities, if proved, he added.
He also assured both the FCCI and PTEA that the State Bank would extend full support to the country's business as we are working towards a common goal of economic growth and prosperity of the nation. Earlier, Sheikh Abdul Qayyum, President FCCI presented welcome address and highlighted the problems of business community regarding banking sector.
At the conclusion, Shabbir Hussain Chawala, Vice President FCCI presented the crest of chamber to the Deputy Governor, State Bank of Pakistan, Muhammad Kamran Shehzad. On this occasion, Mian Javed Iqbal, former President FCCI and Chief Manager SBP Muhammad Saleem were also present.