SBP cuts refinance rate by 1.5pc under financing schemes


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 1.5 percent. Now the exporters can get financing from the banks under EFS at 9.5 percent per annum (p.a.). Earlier, the exporters were getting the financing under this scheme at 11 percent. It had been decided that rate of refinance under the EFS applicable from September 10 this year and onward till further instructions shall be 8.50 percent per year. The central bank through issuing IH&SMEFD circular No. 4 on Monday, asked the commercial banks to 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. The reimbursement of mark-up rate benefit to exporters, on excess performance under Part-II of the scheme, as specified in SMEFD circular no.15 would be adjusted accordingly keeping in view the revised mark-up rates, the bank added.