In order to facilities exporters, the State Bank of Pakistan (SBP) has announced one-month extension in Export Finance Scheme (EFS)/Islamic Export Refinance Scheme (IERS) limits sanctioned by banks. Export refinance limits sanctioned in favour of banks for the year 2016-17 are due to expire on June 30, 2017. Under the present system, exporters are required to submit EE-1 statement for the year 2016-17 duly verified by SBP's Foreign Exchange Operations Department latest by August 31, 2017.
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 2017-18 in time. Therefore, in order to ensure that the financing facilities are available to exporters till finalisation of their new limits under Part-II of the Scheme, it has been decided to extend the existing limits for one month. "Limits sanctioned by banks to individual exporters under Part-II of the Scheme for the year 2016-17 will continue up to August 31, 2017, 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", SBP said in a circular issued.
To get EE-1/EF-1 statements verified and subsequently submit the same to concerned SBP BSC Offices within deadline, ie, August 31, 2017, all exporters should submit EE-1/EF-1 statements duly complete in all respects to concerned FEOD of SBP BSC Office through their banks well in time.
Banks have been advised to inform exporters that they should ensure timely submission of EE-1/EF-1 statements in their own interest and avoid delaying submission of these statements in expectation of extension in deadline. The facility under Part-II is self-regulating and exporters should be able to work out correctly their export earnings during FY 2016-17, estimate the quantum of their entitlement of limit for the year 2017-18 and accordingly adjust their existing borrowings on or before June 30, 2017 to avoid utilisation of excess facilities under the scheme during the period of roll over which would be subject to non-refundable fine, the circular said.
Requests from banks for limits under the Export Finance Scheme and Islamic Export Refinance Scheme for the year 2017-18 should be submitted to SBP separately up to June 30, 2017 to enable the concerned to finalise limits for the year 2017-18. Banks have been asked to ensure submission of their requests for limits within due time. Further, the existing limits of banks under EFS/IERS will continue till fresh limits for FY 2017-18 are notified.
Meanwhile, in a separate circular, the SBP has also announced extension in the limits of Long Term Financing Facility (LTFF). LTFF limits sanctioned in favour of banks/DFIs for the year 2016-17 are also due to expire on June 30, 2017. In order to ensure that financing facilities are available to borrowers till finalisation of new limits under LTFF for the financial year 2017-18, it has been decided to continue the existing limit till fresh limits for FY 2017-18 are notified.