Revision in Long Term Financing Facility - LTFF
Wednesday, April 22, 2009
In order to facilitate the export oriented industries to overcome the prevailing crises and to remain competitive in the world market, State Bank has issued a SMEFD circular # 09 of 2009 dated 21-04-2009 to broaden the scop of Long Term Financing Facility (LTFF Scheme) circulated vide MFD Circular No. 07 dated December 31, 2007 and other instructions issued from time to time in the matter.
Main features are as follows;
- Its an one time opportunity to the exporters (excluding Textile & Garments) to refinance their outstanding long term loans.
- Long term loans eligible for refinance under the LTFF Scheme must be disbursed during the period from 01-01-2005 to 31-03-2009 to the exporters of eligible Sectors/Sub-Sectors mentioned in Schedule 1 of Scheme excluding Textile & Garments.
- No loan disbursed prior to the 01-01-2005 shall be refinanced under these arrangements.
- Exporters of Textile & Garments Sector will not be eligible for refinance under these arrangements. They will, however, continue to be entitled for fresh financing under LTFF Scheme.
- Refinance to banks/DFIs shall be provided only to the extent of 50% of outstanding principal amount at the time of grant of refinance. Remaining 50% shall continue to be financed by the banks/DFIs from their own sources as per original terms & conditions of respective lending institutions.
- Refinance under the arrangements shall be provided at the markup rate prevailing at the time of availment of refinance from the offices of SBP-BSC under LTFF Scheme.
- Refinance shall be provided on the basis of certification by bank’s/DFI’s Internal Audit with regard to outstanding principal.
- No refinance shall be allowed to non-performing loans (NPLs) classified under SBP Prudential Regulations.
- The banks/DFIs shall prepare the repayment schedule for refinanced portion (principal amount only) in line with the repayment schedule already agreed at the time of sanction / disbursement of the original loan.
- They may, however, amend the repayment schedule in a way that the borrowers can make repayments in equal quarterly or half yearly installments as mentioned in LTFF Scheme, however, total tenor of loan shall remain the same.
- A report from PBA’s approved surveyors (acceptable to bank/DFI) is required with regard to confirmation of machinery strictly with the criteria as laid down in LTFF Scheme.
- In case of consortium arrangements, refinance shall be allowed to financing banks/DFIs individually on submission of requisite documents along-with a certificate (in original) from the lead bank/DFI regarding their share in the consortium.
- The refinance obtained shall be checked by Banking Inspection Department (BID) during inspection of the banks/DFIs to ensure that this has been allowed as per laid down criteria.
- Refinance facility under above arrangements shall be a one-time opportunity effective from the date of issuance of this circular and will remain valid only up to 30th June 2009.
posted @ 1:52 PM,
1 Comments:
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At August 12, 2014 at 3:18 PM,
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Well, Its very good improvement for all of us who need long term loans especially for Exporters and financing banks.Installments are easier now. overall it's is a good step toward increasing economic.
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