The State Bank of Pakistan (SBP) has, with immediate effect, reduced the refinance rate under the Export Finance Scheme (EFS); 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.
The rate of refinance under the EFS – applicable from September 10, 2012 and onward till further instructions – will now be 8.50% per annum (pa). Commercial banks shall ensure that where financing facilities are extended by them to exporters for availing refinance facilities under the EFS, their maximum margin does not exceed 1% pa, said a SBP circular on Monday.
This means that now, exporters can get financing from banks under the EFS at 9.5% pa. Earlier, exporters obtained financing under this scheme at 11% pa.
The rates of service charges for Participating Financial Institutions (PFIs) and rates for end users under the 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% for financing up to three years, 8.60% for over three years and up to five years, and 8.20% for over five years and up to 10 years.
Similarly, the rates of service charges under the Scheme for Financing Power Plants Using Renewable Energy have been re-fixed at 8.60% for financing up to five years, according to the circular.
Published in The Express Tribune, September 11th, 2012.
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