SBP cuts refinance rate, service charges

Revised rates will be applicable to many financing schemes.

KARACHI: The State Bank of Pakistan (SBP) has reduced the refinance rate and service charges on its various financing schemes with the exception of financing for over five years and up to 10 years.

In a circular issued on Tuesday, the SBP said the rate of refinance under the Export Finance Scheme (EFS) has been reduced by 0.2% to 8.30% per annum. Exporters will now get financing from banks at 9.30%.

Service charges under the Long Term Financing Facility (LTFF) have been reduced by 0.70% for financing up to three years and by 0.20% for financing up to five years. However, service charges for financing up to 10 years have been increased by 0.20% per annum.

Service charges under the Scheme for Financing Power Plants Using Renewable Energy have also been reduced by 0.20% per annum for financing up to five years. However, charges for financing up to 10 years have been increased by 0.20%.

The SBP said the rate of refinance under the EFS applicable from January 1, 2013 would be 8.30% per annum. Commercial banks will ensure that their maximum margin or spread does not exceed 1%.

The reduced markup will also be applicable to outstanding loans granted under EFS. Accordingly, banks will immediately re-price their outstanding loans, keeping in view the revised markup.

Published in The Express Tribune, January 2^nd, 2013.                

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