Export finance: State Bank revises markup for exporters
The rate of 7.5% will also be applicable to outstanding loans.
KARACHI:
The State Bank of Pakistan (SBP) has revised the markup rate for exporters availing financing facilities under its Export Finance Scheme (EFS), bringing it to 7.5% per annum with effect from July 1.
Banks’ spread for corporate borrowers and SME borrowers will remain unchanged at 1% and 2%, respectively, according to an SBP circular released on Tuesday.
Any exporter can avail EFS through any commercial bank after fulfilling its collateral requirements. The decision to lend is taken by the bank under its own, internally approved credit policy.
The mark-up rate has been linked with the weighted average yield on six-month treasury bills with effect from 2001. The revised markup rate will also be applicable to outstanding loans granted under EFS.
Accordingly, all banks are advised to re-price their outstanding loans granted under EFS. In order to reconcile the position of re-priced loans, banks should submit particulars of outstanding loans re-priced by them under EFS to the SBP, the circular added.
Through a separate circular, the SBP announced that the markup rate for end-users under the Long-Term Financing Facility (LTFF) will be 9% for a maximum financing period of up to 10 years, with effect from July 1.
However, the spread of participating financial institutions (PFIs) will remain the same at 1.5%, 2.5% and 3% for financing up to three years, five years and 10 years, respectively, without changing the maximum rate for end-users at 9%.
The SBP’s refinance rates will be adjusted accordingly for each term of financing, it added.
Published in The Express Tribune, July 9th, 2014.
The State Bank of Pakistan (SBP) has revised the markup rate for exporters availing financing facilities under its Export Finance Scheme (EFS), bringing it to 7.5% per annum with effect from July 1.
Banks’ spread for corporate borrowers and SME borrowers will remain unchanged at 1% and 2%, respectively, according to an SBP circular released on Tuesday.
Any exporter can avail EFS through any commercial bank after fulfilling its collateral requirements. The decision to lend is taken by the bank under its own, internally approved credit policy.
The mark-up rate has been linked with the weighted average yield on six-month treasury bills with effect from 2001. The revised markup rate will also be applicable to outstanding loans granted under EFS.
Accordingly, all banks are advised to re-price their outstanding loans granted under EFS. In order to reconcile the position of re-priced loans, banks should submit particulars of outstanding loans re-priced by them under EFS to the SBP, the circular added.
Through a separate circular, the SBP announced that the markup rate for end-users under the Long-Term Financing Facility (LTFF) will be 9% for a maximum financing period of up to 10 years, with effect from July 1.
However, the spread of participating financial institutions (PFIs) will remain the same at 1.5%, 2.5% and 3% for financing up to three years, five years and 10 years, respectively, without changing the maximum rate for end-users at 9%.
The SBP’s refinance rates will be adjusted accordingly for each term of financing, it added.
Published in The Express Tribune, July 9th, 2014.