SBP slashes export refinance rate by 150bps

State Bank of Pakistan
State Bank of Pakistan

KARACHI: The State Bank of Pakistan (SBP) has with immediate effect reduced the Refinance Rate under the Export Finance Scheme (EFS) and the service charges under the Long Term Financing Facility (LTFF) and the Scheme for Financing Power Plants Using Renewable Energy by 150 basis points or 1.5 percentage points.

Now the exporters can get financing from banks under EFS at 9.5 percent per annum. arlier, the exporters were getting the financing under this scheme at 11 percent.It has been decided rate of refinance under the EFS applicable from September 10, 2012 and onward till further instructions shall be 8.50 percent. The commercial banks shall ensure that where financing facilities are extended by them to the exporters for availing refinance facilities under the EFS, their maximum margin/spread does not exceed 1 percent, according to IH&SMEFD circular number 4 issued to all banks on Monday.

The reimbursement of mark-up rate benefit to exporters, on excess performance under Part-II of the Scheme, as specified in SMEFD circular number 15 October 31, 2009 will be adjusted accordingly keeping in view the revised mark-up rates, the circular added.The rates of service charges for Participating Financial Institutions (PFIs) and rates for end users under LTFF have also been reduced by 150 basis points with effect from September 10, 2012.

The rates of refinance under LTFF will now be 9.50 percent for financing up-to 3 years, 8.60 percent for over 3 years and up-to 5 years and 8.20 percent for over 5 years and up-to 10 years.PFIs’ spread for these tenors will be 1.50 percent, 2.50 percent and 3 percent respectively.Hence, the end users’ rates for these tenors have now been reduced to 11 percent from 12.50 percent, 11.10 percenty from 12.60 percent and 11.20 percent from 12.70 percent respectively, according to IH&SMEFD circular number 5.

Similarly, the rates of service charges under the Scheme for Financing Power Plants Using Renewable Energy have been re-fixed at 8.60 percent for financing up-to 5 years and 8.20 percent for over 5 years and up-to 10 years with effect from September 10, 2012.Banks/DFIs will be allowed to charge 2.50 percent and 3.00 percent spread respectively for these tenors. Hence, the end users’ rates for these tenors have now been reduced to 11.10 percent from 12.60 percent and 11.20 percent from 12.70 percent respectively, according to IH&SMEFD circular number 6. – Dailytimes