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- Export Refinance Loan Scheme
Export Refinance Loan Scheme
- By Of Pakistan
- Published 08/20/2009
- Refinance Loan
- Unrated
11.1 Codes: For the purpose of availing financing facilities under the Scheme, SBP BSC (Bank) Offices and
Commercial Banks shall be assigned a numeric code4 by the Small & Medium Enterprises Department of the SBP,
which shall remain unchanged till further instructions. Similarly, each exporter shall also be assigned a five digit numeric
code by the concerned offices of the SBP BSC (Bank). Once the exporter has been assigned the code, it shall be
mandatory for the banks and the exporters to mention this code in their applications/statements and any other
correspondence under the Scheme. Exporters shall also be required to obtain prior approval from the concerned office
of the SBP BSC (Bank) (who will seek approval from the SMED) for shifting of their borrowings within the jurisdiction of
one SBP Office to other. Such approval shall be granted promptly, provided the exporters request is supported by all its
financing banks (on individual basis) and that the exporter submits the complete borrowing position under different parts
of EFS from different bank(s) along with the amount of refinance availed at the time of seeking permission to transfer its
borrowings from one office of the SBP BSC (Bank) to another. The exporter shall, however, continue to remain liable to
submit the ER-TF and other documents under the Scheme to both offices of the SBP BSC (Bank) covering the period
and the amount availed from them respectively.
11.2 Recovery of Amounts Due to SBP: The recovery of principal amount of refinance, the service charge on
refinance or the fine under the Scheme shall not be contingent
4 This code shall be in accordance with the coding of the banks and SBP Offices, as assigned by the Information
Services Department of the State Bank of Pakistan. upon the submission of a debit advice by the bank concerned. SBP
BSC (Bank) shall, however, ensure that the current account of the bank is not debited, if not justified. However, as each
Refinance Unit invariably mentions the due date of refinance at the time of its grant and will also issue notice for
recovery of fine, and the fact that banks are aware of the due dates for payment of service charges, they are required to
ensure that the total amount likely to be recovered by the State Bank on account of EFS is appropriately intimated to
their concerned departments so as to enable them to make arrangements of sufficient funds in their current account on
the due date of refinance / recovery of fine. Such an arrangement may avoid the shortfall in the cash reserve
requirements of the bank, as also the fine that may be levied on account thereof.
11.3 Approval of SMED for deferred payments/ realization of proceeds: According to Foreign Exchange
Regulations existing at present, the export receipts are generally required to be repatriated to Pakistan within a
maximum period of 180 days from the date of shipment. Therefore, in all cases, where a longer deferred payment
period is involved, the exporter is required to obtain prior approval of the Exchange Policy Department of the State
Bank of Pakistan. For the convenience of the exporters, it has been decided that prior approval of the Small & Medium
Enterprises Department for grant of refinance would also signify approval from the Exchange Control point of view.
Approved PFIs shall invariably seek prior approval of the Small & Medium Enterprises Department before sanction of
the facilities to the exporters where export proceeds are required to be realized in a period exceeding 180 days from the
date of shipment.
11.4 State Bank of Pakistan reserves the right to cancel or reduce the limit granted by it to a scheduled bank or to
reject the demand promissory note of any particular exporter submitted by the bank. State Bank will also have the right
to debar any exporter if it is satisfied that it has misused the facility. Decision of the State Bank in this regard shall be
binding upon banks/ exporters.
11.5 Some important tips for exporters/ banks to facilitate record keeping of the exporter and continuous
monitoring by the banks where facilities have been availed under any part of the scheme, are given hereunder for
guidance:
11.5.1 While scrutinizing the loan application, the bank shall ensure that exporter is availing the loan against a
commodity which is eligible for exports. For this purpose, the HS Code for each commodity as mentioned in scrutiny
sheet (as per Annexure 9) shall be compared with the Negative list and if the code is not appearing in the same, the
commodity for which facility is being sought shall be considered eligible under the Export Finance Scheme.
11.5.2 A stamp should be affixed invariably on the original copy of a firm export order / contract / letter of credit
indicating the refinance loan No. and amount allowed by SBP subsequently for record purpose, where the facilities
have been availed on transaction basis.
11.5.3 In case, any exporter has applied for transaction based finance against a firm export order / contract / letter of
credit which has already availed finance / refinance in part, it must be ensured that the exporter has affixed a stamp on
such firm export order / contract / letter of credit duly countersigned by the authorized signatory of the bank through
which Demand Loan has been obtained.
“Utilized for refinance under Demand Loan (D.L.)
No._________ dated ___________ Amount (in words)” It must also be confirmed that loans being availed of are
covered under the above contract / letter of credit. The bank shall keep original and a photo copy of firm export order /
contract / letter of credit with endorsements on its reverse for record purposes for the period as prescribed under the
Scheme.
11.5.4 It shall be ensured that, no finance is provided to an exporter for any amount of advance payment already
received by him under a firm export order / contract / letter of credit in cases involving transaction based funding under
the Scheme.
11.5.5 To avoid duplicate financing against same export consignment/ contract, EC, ELC, the monitoring of loan shall
be done on the basis of Goods Declaration Form (GDF) and/or E - Form number and the bank will ensure that one
shipment utilized against a particular GDF and/or E – Form is not included for reporting under another firm export order
/ contract / letter of credit or the entry involved has not been / will not be reported for export performance under any
other part.
11.5.6 For transaction based financing under the Scheme the stamp or date of “Shipped on Board” on Bill of Lading or
flight date as shown on Airway bill will form the basis for determining actual date of shipment for calculation of period of
delay in shipment under the Scheme if any. However, where shipment is effected from a Dry Port, the date of receipt for
shipment as appearing on shipping bill or the date of custom clearance on duplicate E Form or GDF appraised by
custom authorities at Dry Port, as the case may be, will be taken into account
11.5.7 In case of transaction based facilities, the banks are required to repay the refinance on realization of proceeds in
full or part thereof as the case may be, within three working days from such realization. Refinance shall be repaid by
bank from its own sources on expiry of the maturity period of the loan. If the bank fails to do so, the concerned office of
the State Bank shall recover the same on due date by debit to its account as is done at present. However, where
repayments have been made by exporter before expiry of the loan, the same shall be repaid to State Bank within three
working days from repayment made by the exporter, excluding the date of repayment to SBP. In case of default in
repayment there will be no grace period and fine for the entire period for which the repayment was delayed will be
charged at the prescribed rate. Intimation regarding repayment, giving particulars of respective demand loan shall be
promptly made to the concerned office of the State Bank of Pakistan. Efforts shall also be made for prompt
communication among different branches of the bank concerned with the branch dealing with respective office of the
State Bank.
11.5.8 It will be obligatory on the part of the exporter to negotiate and realize the export proceeds under a specific PGD
or E - Form through the bank from which he has availed of refinance loan(s). However, in case circumstances do not
permit realization of proceeds under a specific PGD or E-Form/Export documents through the bank which had issued
the same, the realizing bank will realize and pass on the amount realized to the E Form issuing bank, promptly but not
later than 3 working days of receipt of funds by it. Such proceeds when realized will be credited in the accounts of the
exporter by the receiving bank only upon a specific NOC of the E-Form issuing bank. In that case too, the bank issuing
NOC will be held responsible for delay in repayment of amount of refinance loan involved, if any.
11.5.9 The date of realization for the purpose of repayment of finance shall be the date of receipt of telex, advice or
swift message by the Head Office or Principal Office or Zonal Office of a bank, however, overnight receipts of such
telex / advices / messages will be considered as receipts in the next working day in Pakistan. The export proceeds shall
be appropriated within three working days towards liquidation of refinance loan. The Head Office / Principal or Zonal
Office should ensure that it passes credits immediately to the concerned branches within a reasonable period of time.
The date of liquidation of refinance loan shall be exclusive of the grace period.
Commercial Banks shall be assigned a numeric code4 by the Small & Medium Enterprises Department of the SBP,
which shall remain unchanged till further instructions. Similarly, each exporter shall also be assigned a five digit numeric
code by the concerned offices of the SBP BSC (Bank). Once the exporter has been assigned the code, it shall be
mandatory for the banks and the exporters to mention this code in their applications/statements and any other
correspondence under the Scheme. Exporters shall also be required to obtain prior approval from the concerned office
of the SBP BSC (Bank) (who will seek approval from the SMED) for shifting of their borrowings within the jurisdiction of
one SBP Office to other. Such approval shall be granted promptly, provided the exporters request is supported by all its
financing banks (on individual basis) and that the exporter submits the complete borrowing position under different parts
of EFS from different bank(s) along with the amount of refinance availed at the time of seeking permission to transfer its
borrowings from one office of the SBP BSC (Bank) to another. The exporter shall, however, continue to remain liable to
submit the ER-TF and other documents under the Scheme to both offices of the SBP BSC (Bank) covering the period
and the amount availed from them respectively.
11.2 Recovery of Amounts Due to SBP: The recovery of principal amount of refinance, the service charge on
refinance or the fine under the Scheme shall not be contingent
4 This code shall be in accordance with the coding of the banks and SBP Offices, as assigned by the Information
Services Department of the State Bank of Pakistan. upon the submission of a debit advice by the bank concerned. SBP
BSC (Bank) shall, however, ensure that the current account of the bank is not debited, if not justified. However, as each
Refinance Unit invariably mentions the due date of refinance at the time of its grant and will also issue notice for
recovery of fine, and the fact that banks are aware of the due dates for payment of service charges, they are required to
ensure that the total amount likely to be recovered by the State Bank on account of EFS is appropriately intimated to
their concerned departments so as to enable them to make arrangements of sufficient funds in their current account on
the due date of refinance / recovery of fine. Such an arrangement may avoid the shortfall in the cash reserve
requirements of the bank, as also the fine that may be levied on account thereof.
11.3 Approval of SMED for deferred payments/ realization of proceeds: According to Foreign Exchange
Regulations existing at present, the export receipts are generally required to be repatriated to Pakistan within a
maximum period of 180 days from the date of shipment. Therefore, in all cases, where a longer deferred payment
period is involved, the exporter is required to obtain prior approval of the Exchange Policy Department of the State
Bank of Pakistan. For the convenience of the exporters, it has been decided that prior approval of the Small & Medium
Enterprises Department for grant of refinance would also signify approval from the Exchange Control point of view.
Approved PFIs shall invariably seek prior approval of the Small & Medium Enterprises Department before sanction of
the facilities to the exporters where export proceeds are required to be realized in a period exceeding 180 days from the
date of shipment.
11.4 State Bank of Pakistan reserves the right to cancel or reduce the limit granted by it to a scheduled bank or to
reject the demand promissory note of any particular exporter submitted by the bank. State Bank will also have the right
to debar any exporter if it is satisfied that it has misused the facility. Decision of the State Bank in this regard shall be
binding upon banks/ exporters.
11.5 Some important tips for exporters/ banks to facilitate record keeping of the exporter and continuous
monitoring by the banks where facilities have been availed under any part of the scheme, are given hereunder for
guidance:
11.5.1 While scrutinizing the loan application, the bank shall ensure that exporter is availing the loan against a
commodity which is eligible for exports. For this purpose, the HS Code for each commodity as mentioned in scrutiny
sheet (as per Annexure 9) shall be compared with the Negative list and if the code is not appearing in the same, the
commodity for which facility is being sought shall be considered eligible under the Export Finance Scheme.
11.5.2 A stamp should be affixed invariably on the original copy of a firm export order / contract / letter of credit
indicating the refinance loan No. and amount allowed by SBP subsequently for record purpose, where the facilities
have been availed on transaction basis.
11.5.3 In case, any exporter has applied for transaction based finance against a firm export order / contract / letter of
credit which has already availed finance / refinance in part, it must be ensured that the exporter has affixed a stamp on
such firm export order / contract / letter of credit duly countersigned by the authorized signatory of the bank through
which Demand Loan has been obtained.
“Utilized for refinance under Demand Loan (D.L.)
No._________ dated ___________ Amount (in words)” It must also be confirmed that loans being availed of are
covered under the above contract / letter of credit. The bank shall keep original and a photo copy of firm export order /
contract / letter of credit with endorsements on its reverse for record purposes for the period as prescribed under the
Scheme.
11.5.4 It shall be ensured that, no finance is provided to an exporter for any amount of advance payment already
received by him under a firm export order / contract / letter of credit in cases involving transaction based funding under
the Scheme.
11.5.5 To avoid duplicate financing against same export consignment/ contract, EC, ELC, the monitoring of loan shall
be done on the basis of Goods Declaration Form (GDF) and/or E - Form number and the bank will ensure that one
shipment utilized against a particular GDF and/or E – Form is not included for reporting under another firm export order
/ contract / letter of credit or the entry involved has not been / will not be reported for export performance under any
other part.
11.5.6 For transaction based financing under the Scheme the stamp or date of “Shipped on Board” on Bill of Lading or
flight date as shown on Airway bill will form the basis for determining actual date of shipment for calculation of period of
delay in shipment under the Scheme if any. However, where shipment is effected from a Dry Port, the date of receipt for
shipment as appearing on shipping bill or the date of custom clearance on duplicate E Form or GDF appraised by
custom authorities at Dry Port, as the case may be, will be taken into account
11.5.7 In case of transaction based facilities, the banks are required to repay the refinance on realization of proceeds in
full or part thereof as the case may be, within three working days from such realization. Refinance shall be repaid by
bank from its own sources on expiry of the maturity period of the loan. If the bank fails to do so, the concerned office of
the State Bank shall recover the same on due date by debit to its account as is done at present. However, where
repayments have been made by exporter before expiry of the loan, the same shall be repaid to State Bank within three
working days from repayment made by the exporter, excluding the date of repayment to SBP. In case of default in
repayment there will be no grace period and fine for the entire period for which the repayment was delayed will be
charged at the prescribed rate. Intimation regarding repayment, giving particulars of respective demand loan shall be
promptly made to the concerned office of the State Bank of Pakistan. Efforts shall also be made for prompt
communication among different branches of the bank concerned with the branch dealing with respective office of the
State Bank.
11.5.8 It will be obligatory on the part of the exporter to negotiate and realize the export proceeds under a specific PGD
or E - Form through the bank from which he has availed of refinance loan(s). However, in case circumstances do not
permit realization of proceeds under a specific PGD or E-Form/Export documents through the bank which had issued
the same, the realizing bank will realize and pass on the amount realized to the E Form issuing bank, promptly but not
later than 3 working days of receipt of funds by it. Such proceeds when realized will be credited in the accounts of the
exporter by the receiving bank only upon a specific NOC of the E-Form issuing bank. In that case too, the bank issuing
NOC will be held responsible for delay in repayment of amount of refinance loan involved, if any.
11.5.9 The date of realization for the purpose of repayment of finance shall be the date of receipt of telex, advice or
swift message by the Head Office or Principal Office or Zonal Office of a bank, however, overnight receipts of such
telex / advices / messages will be considered as receipts in the next working day in Pakistan. The export proceeds shall
be appropriated within three working days towards liquidation of refinance loan. The Head Office / Principal or Zonal
Office should ensure that it passes credits immediately to the concerned branches within a reasonable period of time.
The date of liquidation of refinance loan shall be exclusive of the grace period.
