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STATE BANK OF PAKISTAN
BANKING POLICY & REGULATIONS DEPARTMENT
CENTRAL DIRECTORATE
KARACHI

BPRD Circular No.44.
All Banks.

17th December 1998

Dear Sir,

EXPORT FINANCE SCHEME

Please refer to the instructions issued on the captioned Scheme from time to time.

It has been decided to amend the existing instructions on the captioned Scheme, in particular those relating to the provision of finance to the exporter and the grant of refinance by SBP. Under the revised modus operandi, the banks shall ensure that the financing facilities under the Export Finance Scheme are made available to the other entity generating exports i.e., Indirect Exporters instead of existing procedure to allow ' finance to only one entity directly exporting the eligible commodities. Under the revised procedure, efforts have also been made to ensure that the small medium and emerging exporters as also indirect exporters have adequate access to the credit facilities under Export Finance Scheme, if otherwise eligible. As an important tool to ensure this, the Government also intends to introduce Pre-shipment Export Finance Guarantee Scheme to be administered through a new corporate entity. The cover obtained by the Exporters under the said Scheme particularly the Small and Medium Exporters would substitute for the collateral requirements of the banks and thus hedge the financing risk of the commercial banks against manufacturing non performance and non delivery risks and non payments by the exporters. Detailed instructions in this regard shall be issued shortly.

The State Bank of Pakistan is also in the process of announcing, the Foreign Currency import Finance Scheme thereby enabling the Direct Exporter or Indirect Exporter to have access to foreign currency financing for the purpose of import of imported inputs, in order to execute his export order / supplies to the Direct Exporter, backed by a Firm Export order or Export Letter. of Credit with the Direct Exporter. Detailed instruction in this regard shall be issued separately. It is also clarified that the requirement of 30% minimum cash margin shall not be applicable on LCs established for the items imported against various Schemes of temporary imports for exports e.g. NDND Scheme, Manufacturing in Bond Scheme etc. It is further clarified that the words

"loans/credits/aid" appearing in BPRD Circular No. 40 of 2I at November 1996 would include the facilities availed by the beneficiaries under. the proposed FCIF arrangements.

4. The maximum rate of finance to be charged by the banks from their borrowers under the Scheme shall remain 8% as at present. Where refinance is obtained by the banks against finances already provided under the Scheme. The State Bank shall share in the overall profit of the banks concerned subject to a maximum of 6% when annualized. The banks shall invariably make payment of the provisional profit on quarterly basis to the concerned Office of the State Bank of Pakistan on or before 7th of the month after end of the quarter concerned.

5. Revised instructions on the Export Finance Scheme are enclosed. which shall become effective from 1st January, 1999. A handbook containing instructions on the EFS is also being issued separately for the guidance of the Commercial Exporters.

Please acknowledge receipt.

                                                                                                            Yours faithfully,

 

 

                                                                                                    Sd/-

                                                                                          ( Mansur-ur-Rehman Khan )

                                                                                                            Director

Enel : As above

Annexure to BPRD Curricular No. 44                                                                                  of 17th December 1998.

 

REVISED PROCEDURE ON EXPORT FINANCE SCI-IEME

It has been decided to revise the Export Finance Scheme in order to provide desired impetus to the exports by the Small and Medium Exporters, Emerging Exporters and Indirect Exporters as defined below.-

Small or Medium Sized Enterprise (SME) is a direct or indirect exporter and which exports upto equivalent of US$ 2,500,000 of direct or Indirect export during the preceding fiscal year.

Emerging Direct Exporter (EDE) means a new exporter who has not previously exported products.

Indirect Exporter (IDE) means a manufacturer or supplier of goods or materials which is to be used as an input for exports.

Direct Exporter includes a commercial exporter/trading company,.

Financing facilities under the Scheme shall continue to be available for exporters with export performance in excess of the upper limit prescribed for the Small & Medium Exporters. The list of ineligible commodities i.e. "Negative List" shall continue to remain effective. An updated list of such commodities alongwith their Harmonised Code is attached.

The Scheme shall, however continue to operate in two parts as at present. The exporter can avail the facility under both parts of the Scheme provided that the facility availed under one Part is not in duplication of the facility availed under the other Part of the Scheme. It may be mentioned that the revised procedure has laid stress on the provision of finance / refinance to the Indirect Exporters under both Parts. However, while under Part-II the borrowing entitlements as also the performance requirements shall continue to remain applicable in respect of the Direct Exporter, the financing facility to the Indirect Exporter shall be provided on specific order basis, and against establishment of Inland Letter of Credit i.e. ILC. Payment through cheques on revolving basis, to indirect exporters, will not be available.

The financing facilities to all eligible commodities shall be available for 160 days. Banks will, however, ensure that the aggregate period of financing provided to both Direct and Indirect Exporters does not exceed 180 days under both Parts of the Scheme.

An Apex Unit has also been established in the Banking Policy & Regulations Department to deal with the cases relating to the revised Export Finance Scheme. Likewise the commercial banks have also been advised to establish Export Cell for exclusive handling of the cases / documentation relating to the Export Finance Scheme.

OPERATIONS OF THE SCHEME

EXPORT FINANCE UNDER PART - 1

1. Under Part - 1 of the Scheme the commercial banks shall provide finance to the Direct Exporters (DE), against firm Export Order (FEO)/Export Letter of Credit (ELC). They shall also provide finance to those parties (Indirect Exporter - IDE) who supply eligible inputs to the Direct Exporter for further processing provided the Direct Exporter has established an inland letter of credit in favour of such supplier (IDE) where applicable.

ILLUSTRATION

2. In this regard attention of Banks is also invited to Prudential Regulation No. III in terms of which clean facilities granted to finance the export of commodities eligible under Export Finance Scheme shall be exempt from the per party limit on clean facilities. Finance to Indirect Exporter tinder this Scheme will also be exempted from the restriction placed in respect of clean advances under Prudential Regulations. Likewise other relaxation / exemptions as are provided to the Exporters under Prudential Regulations for export covered under Export Finance Scheme shall also be applicable to the Indirect Exporters. Banks are therefore encouraged to extend financing under this Scheme against foreign letter of credit and inland letter of credit payments through cheques. The Government has a plan to set up a Pre-shipment Export Finance Guarantee (PEFG) Scheme for the primary benefit of indirect and small and medium sized exporters as also the emerging exporters. Once the PEFG Scheme is established, the cover obtained under it will provide guarantees in favour of the lending banks that make available pre-shipment funding under EFS and FCIF to Direct / Indirect / Small, Medium and Emerging Exporters and it will serve as a substitute for collateral. Commercial banks are encouraged to meet the post shipment export finance requirements of their customers through re-discounting of export bills in accordance with the rate laid down in F.E. Circular No.5 of' 1998 issued by our Foreign Exchange Department, specially in those cases where the bills of exchange have been drawn by their customers against L.Cs of reputable bank or where not covered by L.C, bills have been accepted by the drawees.

3.    Upon establishment of an Export Letter of Credit or on receipt of Firm Export Order in the name of the Direct Exporter, the Direct Exporter shall approach the financing bank, indicating his financial needs for inputs on the prescribed format DE-1 (specimen attached). The Direct Exporter will be under obligation to specify his production ad shipment schedules as also his estimated requirements for purchase of domestic / imported inputs from his indirect exporters, as also the imported inputs, if any, that he intends to import directly. It may be noted that a manufacturer exporter does not procure small items of inputs only after receipt of an export order and only to the extent required for fulfilment of that export order. In the illustration given in paragraph 1 above, the exporter may buy sewing thread and button in bulk in order to meet his requirements for the next few months. Banks may, therefore, take into account the nature of goods being produced and exported by their client and provide finance on the basis of his actual needs for production during the next four months and not restrict it to the purchase of the individual inputs to the extent stated in application form DE - 1.

4. The financing facility under Export Finance Scheme, if otherwise admissible shall be sanctioned by the bank in favour of the Direct Exporter for an amount not exceeding the value of the export order/LC on production of the following documents:-

The disbursements against the said sanctions, shall be made on actual need basis and released either through cheques drawn in favour of the suppliers of inputs or through ILC to be established on behalf of the Direct Exporter in favour of the Indirect Exporters (i.e. suppliers of inputs). The Government will be setting up an export market / product upgrading matching grants Fund, managed by the Export Promotion Bureau, which would be available as an incentive to Direct Exporters opening ILC and for indirect Exporters receiving it. The Direct Exporter may also be allowed to draw the loan to the extent of his own eligible material and value addition. The bank shall, however, ensure that the total amount withdrawn by the Direct Exporter through cheques and value of ILC established on his behalf does not exceed the value of the export finance admissible to him against the particular export commitment

5. The combined period of financing against an export order to the Direct Exporter as also to his suppliers i.e. Indirect Exporter shall also not exceed the permissible period of 180 days from the date of first drawal / disbursement from the loan account. The period of loan to the Indirect Exporter shall be predetermined on the basis of the period given in the Inland LC, and the finance/refinance where applicable, shall be allowed for the period covered under the ILC, but not exceeding 120 days.

6. The financing bank shall become entitled to obtain refinance from the State Bank of Pakistan against finance(s) provided to the Direct Exporter for manufacturing / subsequent value addition for execution of the relevant export order, on production of the documents mentioned in parcel 4 above and application on form EC-1 (Specimen attached). -[he concerned office ol' the SBP will grant refinance in favour of the banker of the Direct Exporter and release the amount accordingly, within 48 hours from the receipt of application duly complete in all respect.

7. While the export of the commodity, against said 1.'lriii Export Order Export Letter of Credit, shall remain the responsibility of the direct exporter, the indirect exporter would be under obligation to supply the required inputs in accordance with the terms of the ILC, failing which he shall be liable for fines under the Scheme. Payment of such fines shall, however, not absolve him from his liabilities to the direct exporter.

8. On the basis of information contained in Form DE-1, the financing bank may at the request of the Direct Exporter, open an ILC in favour of the Indirect Exporter i.e. domestic supplier. The banker to the Indirect Exporter may allow export finance at the concessionaire rate applicable under the Export Finance Scheme to the Indirect Exporter in the same manner as laid down in Para 4 above.

9. The financing facilities shall be provided by the financing bank to the Indirect Exporter (IDE), upon submission of application on Form "IDE-I" including following documents (specimen attached) to be executed by the Indirect Exporter:-

1 0. The refinance to the loans granted by the financing bank to the Indirect Exporters, under ILC, shall be provided by the concerned Office of the SBP upon submission of the following documents, within 48 hours front the receipt of application duly completed in all respects:-

11. The loan granted to the Indirect Exporter, alongwith mark-up thereon, shall be adjusted upon delivery of the inputs and payment of documents drawn under the ILC or at the expiry of the period of 120 days, whichever is earlier. The Indirect Exporter shall be under obligation to produce the following documents, to the banker of the Direct Exporter, evidencing utilisation of the loan for the purpose of manufacturing the input:-

A certified copy each of the above documents containing the acknowledgement of the Direct Exporter, shall also be passed on to the State Bank by the concerned Indirect Exporter through its banker, who availed refinance from the State Bank. The said documents, accompanied by the statement "IES" (as per specimen attached) to be filled in by the banker of the IDE concerned, shall be submitted within 15 working days from the date of Goods Receipt Notes/Deliver Challan.

12. On deliveries of the domestic inputs and receipt of' payment by the supplier i.e. Indirect Exporter, the amount(s) of the finance earlier granted in his favour shall be adjusted. Refinance drawn against the said finance shall also be adjusted. Refinance drawn against the said finance shall also be adjusted by the banker of the Indirect Exporter within 3 working days. The payment against the ILC shall become a Loan disbursement in the name of the Direct Exporter, who will thereafter become responsible for repayment of the loan & payment of mark-up, and fines if applicable, and all mark up charges from the date of said transfer shall be borne by him. The banker of the Direct Exporter shall become eligible to obtain refinance from the SBP against disbursement so made in terms of para 4 above.

13. All the ILCs opened in favour of IDE shall bear an indication that these have been opened for the supply of inputs for export & would contain the name of the exporter and Number of Export Order / ELC. The financing bank of the Indirect Exporter shall be under obligation to certify that the facility availed by the Indirect Exporter was covered by the Export LC or Firm order of the Direct Exporter. A provision to this effect has also been incorporated in the Form EC-1 i.e. the form to be used by the financing bank to obtain refinance front SBP.

14. The Direct Exporter shall be liable to submit the proof of shipments against the relevant Firm Export Order / Export Letter of Credit within 30 days from the date of shipment {last shipment in the case of fragmented shipment(s)} or from the date of expiry of loan which ever is earlier. In case shipping documents are not received by SBP office on or before 30 days from the date of the expiry of the loan, they shall recover fine from the concerned bank, treating the refinance case as that of non-shipment. The fine so recovered shall be refunded upon submission of the prescribed documents, after adjusting the fine, on account of delayed/short shipment if any and fine for delayed submission of the presented documents. In the case of delayed shipment, a grace period from date of expiry of loan upto ')0 days from the date of delayed shipment, would be allowed while calculating fine for delayed submission of documents. The concerned office of SBP shall however be under obligation to refund the amount of fine as mentioned herein first, within a maximum period of 15 working days from the receipt of the prescribed documents, provided they are complete and in order.

15. The shipping documents required to be submitted by the Direct Exporter shall be submitted through the bank of the Direct Exporter on Form ED-1 and shall include the followings:-

16. In case the Direct Exporter fails to make shipment under the relevant Firm Export Order / Export Letter of Credit on the basis of which finance / refinance gas been availed by him, he shall be under obligation to produce shipping documents evidencing shipment of the export of eligible commodity valuing the amount of loan, in respect of another Firm Export Order / Export Letter of Credit provided on refinance there against has been availed by him or Indirect Exporter under the revised mechanism, at the time of submission of shipping documents. The Bank concerned is authorised to accept and certify the correctness of the statement of Direct Exporter in this regard.

17. Upon receipt of shipping documents, the concerned office of the SBP shall scrutinise the same, within a maximum period of 10 working days, and would ensure that objections therein are apprised to the bank concerned promptly seeking clarifications from the bank concerned, with a copy to the Direct Exporter, preferably through fax. The Bank / Exporter shall be under obligation to submit their clarifications within 15 days from the receipt of such letter. While scrutinising the shipping documents the SBP office concerned shall ensure that an eligible commodity covering the of loan to the extent of aggregate amount o f loan provided to Direct and Indirect Exporter ( inclusive of the loan provided to Direct Exporter for imported inputs) has been shipped.

The refinance availed of by the banker of the Direct / Indirect Exporter, shall be repaid to the State Bank within days of the repayment by the IDE/DE or on the expiry of the refinance period, whichever is earlier. Likewise in case of premature payments by the Direct Exporter to the Indirect Exporter or receipt of export proceeds prior to the expiry of the refinance period, the refinance shall also be adjusted within working days from such prepayments / premature receipt of export proceeds failing which fine at the prescribed rates shall be levied on the bank concerned.

EXPORT FINANCE INDER PART - II

18. Under Part-II of the Scheme, a Direct Exporter shall be entitled to avail finance limit equivalent to 50% of his export performance during the preceding year ( on July – June basis), in respect of specified eligible commodities by furnishing an undertaking to the bank as per Form UT-DE-II. The DE many authorise their banker to open ILC(s) in favour of IDE(s) for making supplies of inputs to him as per procedure laid down in Para 9 above, within the prescribed limit as per form DE-3 (specimen attached). The amount of the limit availed of' by the Direct Exporter as also the amounts of ILC(S) opened in favour of IDE(S) for supply of domestic inputs, when taken together, shall not exceed his entitlement of limit. The bank may, however, sanction a foreign currency loan in respect of the imported inputs in accordance with the procedure as and when laid down by our FED, under Proposed FCIF arrangements.

19. The Direct Exporter shall be under obligation to repatriate export proceeds from the export of specified commodities equivalent to 2.0 times of the daily average finance availed by him including finances availed by his Indirect Exporter(s) under ILC(S) opened by the DE. The limit shall be available to the Direct Exporter on revolving basis like a cash credit account. The amount of the limit availed of by the Direct Exporter as also the amounts of ILC(S) opened 'n favour of IDE(S) for supply of domestic inputs, shall not exceed the entitlement of limit at any point of time. It may however be ensured that in individual instance the loan shall not remain outstanding beyond a maximum period of 180 days.

20. On receipt an application from the Direct Exporter, on Form "DE-')" requesting for grant of financing facilities to the specific Indirect Exporter(s), for supply of domestic inputs, the financing bank shall open ILC(S) in favour of the said indirect exporter(s), by reducing the entitlement of the Direct Exporter under Part-11 of the Scheme. The bank shall also provide financing facilities, to the extent of his balance entitlement of ' limit to the Direct Exporter, after adjusting the amount(s) of ILC(S) issued in favour of the Indirect Direct Exporter against his actual requirements for value addition depending upon manufacturing schedules.

21. Upon submission of application on Form "IDE-2 (specimen attached) by the IDE, the banker of the DE or IDE, as the case may be, shall provide finance to the extent of the amount of the ILC(S) to the IDE concerned upon production of the documents as prescribed in Para 8 on the basis of which financing facility under Part 1 is available to the IDE.

22. The refinance to the extent of the amount released by the financing bank of the Direct Exporter(s) to the Indirect Exporter(s), against ILC(s), shall be provided by the concerned Office of the SBP to the banker of the Indirect Exporter, upon submission of the following documents (as already spelt out in Para 9 above):- limit as per form DE-3 (specimen attached). The amount of the limit availed of' by the Direct Exporter as also the amounts of ILC(S) opened ill favour of IDE(S) for supply of domestic inputs, when taken together, shall not exceed his entitlement of limit. The bank may, however, sanction a foreign currency loan in respect of the imported inputs in accordance with the procedure as and when laid down by our FED, under Proposed FCIF arrangements.

23. The Direct Exporter shall be under obligation to repatriate export proceeds from the export of specified commodities equivalent to 2.0 times of the daily average finance availed by him including finances availed by Ills Indirect Exporter(s) under ILC(S) opened by the DE. The limit shall be available to the Direct Exporter on revolving basis like a cash credit account. The amount of the limit availed of by the Direct Exporter as also the amounts of' ILC(S) opened in favour of IDE(S) for supply of domestic inputs, shall not exceed the entitlement of limit at any point of time. It may however be ensured that ill individual instance the loan shall not remain outstanding beyond a maximum period of 180 days.

24. On receipt an application from the Direct Exporter, on Form "DE-3" requesting for grant of financing facilities to the specific Indirect Exporter(s), for supply of domestic inputs, the financing bank shall open ILC(S) in favour of the said indirect exporter(s), by reducing the entitlement of the Direct Exporter under Part-11 of the Scheme. The bank shall also provide financing facilities, to the extent of his balance entitlement of. limit to the Direct Exporter, after adjusting the amount(s) of ILC(S) issued in favour of the Indirect Direct Exporter against his actual requirements for value addition depending upon manufacturing schedules.

25. Upon submission of application on Form "IDE-2 (specimen attached) by the IDE, the banker of the DE or IDE, as the case may be, shall provide finance to the extent of the amount of the ILC(S) to the IDE concerned upon production of the documents as prescribed in Para 8 on the basis of which financing facility under Part 1 is available to the IDE.

26. The refinance to the extent of the amount released by the financing bank of the Direct Exporter(s) to the Indirect Exporter(s), against ILC(s), shall be provided by the concerned Office of the SBP to the banker of the Indirect Exporter, upon submission of the following documents (as already spelt out in Para 9 above):-

The amount and period of refinance against amount released by the banker of the Direct Exporter to each Indirect Exporter, shall not exceed as mentioned in relevant.

27. The loan granted to the Indirect Exporter(s), alongwith mark-up thereon, shall be adjusted upon submission of the documents evidencing delivery of the inputs and negotiation of ILC(s). The Indirect Exporter(s) shall be under obligation to produce the following documents to the banker of the Direct Exporter, evidencing delivery / acceptance of the domestic inputs by him to the Direct Exporter as per procedure laid down in Para 1 I:-

28. On production of documents mentioned in para 23 above, evidencing deliveries of the domestic inputs, the amount(s) of the loan(s), earlier granted in favour of Indirect Exporter(s) shall be transferred in the name of the Direct Exporter and all mark up charges from the date of said transfer shall be borne by the Direct Exporter. The refinance earlier availed by the bank of the Direct Exporters, against disbursement(s) released to Indirect Exporter(s) shall continue to remain outstanding till the monitoring period or upto maturity of loan whichever is earlier.

29. While the required matching of performance against the borrowings under Part 11, shall remain the prime responsibility of Direct Export which will be available to him on a revolving basis to the extent of his balance entitlement, each Indirect Exporter would be under obligation to supply the required inputs on a case by case basis in accordance with the terms of the Inland Letter of Credit, failing which he shall be liable for fines under the Scheme on the scale of fines for non shipment under Part 1. Payment of such fines shall, however, not absolve the Indirect Exporter(s) from his / their liabilities to the Direct Exporter.

30. The financing bank of the Direct Exporter, shall become entitled to avail refinance on the basis of amount of export proceeds realised during the preceding year in terms of EE-1 statement duly verified by Foreign Exchange Department of State Bank of Pakistan. The quantum of refinance shall however not exceed his balance entitlement i.e. entitlement adjusted after excluding the amount of ILC. The refinance shall however be provided by the respective Office of the SBP on the basis of information contained in Form DE-3 and on production of following documents:-

31. The Direct Exporter shall be under obligation to submit Form EF-1 (specimen attached) after the close of the respective monitoring year, but not later than 31st August each year, evidencing realization of export proceeds equivalent to the prescribed performance, duly verified from our FED. The borrowing products of the loan(s) availed by individual Indirect Exporters shall be added into the borrowing products of the amount(s) of loan availed by the concerned Direct Exporter for the purpose of monitoring and matching actual performance with the required performance and calculation of short fall, if any, for the purpose of levy of fine as prescribed under the Scheme.

FINE UNDER THE SCHEME

32. With the modifications in the procedures for availing finance/refinance, increase in the period of financing and other relaxation in the Scheme as spelt out above, the scales of fine under the Scheme shall be as under:-

1) If an Indirect Exporter who has obtained the finance under Part 1 of the Scheme fails to supply the goods as per schedule of delivery to the Direct Exporters or a Direct Exporter falls to ship the goods involved, he shall be subjected to fine on account of non shipment at the rate of Paisa 37 per day per Rs.1,000/= or part thereof.

II) In case the Indirect Exporter or the Direct Exporter ships the goods subsequent to the expiry of loan, he shall be liable to pay fine only for the peirod of delay in supply/shipment at the rate of Pasa 37 per day per Rs.1,000/= or part thereof.

III) In case a Direct Exporter who had obtained finance under Part-II of the Scheme, fails to match his borrowings by his export performance, lie shall be subjected to a fine of Paisa 37 per 1000 or par of the borrowing product.

IV) In case the Indirect exporter who has availed finance/refinance tinder Part-11 of the Scheme, fails to supply the domestic inputs as per terms of the ILC, he shall be liable for fine at the rate of Paisa 3 7 day per Rs.1 000/= or part thereof on the entire amount of finance/availed by him. In case the supplies are made subsequently, fine for delayed supplies shall be recovered from him for the period involved at the same rate.

V) If a bank fails to deposit with the State Bank, towards repayment of the respective refinance loan, the amount of a repayment made to it by/on account of the exporters/supplier within 3 days of receipt of the amount by it, it shall be subject to a fine at the rate of Paisas 60 per Rs.1,000/= or part thereof on the amount involved till the amount is deposited with the State Bank.

VI) Fines for any other defaults by the Direct / Indirect Exporter shall be recovered at the rate of Rs.2,000/= for the default and Rs.100 per day for each day of default.

I DE - 1

 

(Name & Address of the Indirect Exporter)

FORM OF APPLICATION FOR CLAIMING FINANCING FACILITIES
UNDER EXPORT FINANCE SCHEME BY THE INDIRECT EXPORTER
FOR SUPPLY OF LOCAL INPUTS AGAINST ILC.

THE MANAGER,
(NAME OF THE BRANCH)
NAME OF THE BANK
(PLACE)

Dear Sir,

FINANCE FACILITY UNDER EXPORT FINANCE SCHEME AGAINST SUPPLIES OF LOCAL INPUTS UNDER ILC

We have been authorised to supply the local inputs (name of the commodity) by M/s. (Name of the Direct Exporter) against ILC No-- ----------- dated ---------------- amounting to Rs.-------- with validity upto

------- and established by (name of the bank). We therefore request you to provide finance of Rs ----------- for --- ------- days under the terms and condition of the Export Finance Scheme. The following documents are submitted as prescribed under the scheme.

- Inland Letter of Credit.

- DP Note covering the amount of ILC payment through cheques.

- Undertaking (by Indirect Exporter on the prescribed Performa UT-IDE-1)

We undertake to repay the finance on the expiry of the period or earlier upon supplies made to the Direct Exporter named above and negotiate the documents under ILC involved. We further undertake to submit relevant proof of supplies to your bank for submission to the banker of the Direct Exporter and the concerned office of State Bank of Pakistan.

 

                                                                                                Yours faithfully,

 

 

Encl:                                                                                  (Name & Address of the Indirect Exporter).

 

No. ________________

Date ________________

 

I DE - 2

(Name & Address of the Indirect Exporter)

FORM OF APPLICATION FOR CLAIMING FINANCING FACILITIES
UNDER EXPORT FINANCE SCHEME BY THE INDIRECT EXPORTER
FOR SUPPLY OF LOCAL INPUTS AGAINST ILC.

 

THE MANAGER,
(NAME OF THE BRANCH)
NAME OF THE BANK
(PLACE)

Dear Sir,

FINANCE FACILITY AGAINST SUPPLIES OF LOCAL INPUTS UNDER ILCs BY THE DIRECT EXPORTER OUT OF ENTITLEMENTUNDER PART II OF EFS

We have been authorised to supply the local inputs (name of the commodity) by M/s. (Name of the Direct Exporter) against ILC No-- ----------- dated ---------------- amounting to Rs.-------- with validity upto

------- within their entitlement of borrowing limit under Part II of the export Finance Scheme and established by (name of the bank). We therefore request you to provide finance of Rs ----------- for --- ------- days under the terms and condition of the Export Finance Scheme. The following documents are submitted as prescribed under the scheme.

- Inland Letter of Credit.

- DP Note covering the amount of ILC payment through cheques.

- Undertaking (by Indirect Exporter on the prescribed Performa UT-IDE-1)

We undertake to repay the finance on the expiry of the period or earlier upon supplies made to the Direct Exporter name above and negotiate the documents under ILC involved. We further undertake to submit relevant proof of supplies to your bank for submission to the banker of the Direct Exporter and the concerned office of State Bank of Pakistan which will form part of the peformance when shippend and reported by the Direct Exporter in their EF-I statement upon expiry of the monitoring year.

                                                                                                                            Yours faithfully,

 

Encl:                                                                             (Name & Address of the Indirect Exporter).

 

No. ________________

Date ________________

UT-DE-1

UNDERTAING (for Direct Exporter)

UNDERTAKING TO BE SUBMITTED TO THE BANK BY THE
EXPORTER AT THE TIME OF OPENING OF AN INLAND
LETTER OF CREDIT AGAINST EXPORT LETTER OF
CREDIT/FIRM EXPORT ORDER

(To be furnished on non-judicial stamp paper)

The Manager
______________ (Branch)
______________ (Bank)
______________ (Place)

 

Dear Sir,

We confirm having requested you to open an irrevocable Inland Letter of Credit (ILC) for the value of

Rs ---------- in favour of M/s------------------------------------- for supply of --------------------------------------------------- required for making exports under the irrevocable export letter of credit (ELC)/Firm Export Order (EFO), the particulars of which are given below:-

i ) Registration No. Name & Address of Indirect Exporter.

ii) ELC/EFO No. and date.

iii) Commodity to be supplied under ELC/EFO.

iv) Quantity.

v) Amount.

vi) Estimated Delivery Period.

2. We hereby confirm that the Firm Export Order (EFO) against which we have requested opening an Inland Letter of Credit would be covered by an Export Letter of Credit to be opened subsequently the details of which will be furnished in due course but not later than expiry of the ILC against which goods will be supplied to the Direct Exporter.

3. It is understood that the ILC has been established and financed by you under the Export Finance Scheme against Export Letter of Credit/Firm Export Order and we in our capacity as Direct Exporter shall remain liable for fulfilment of all the obligations under the said Scheme.

4. It is expressly understood that non-performance by the Indirect Exporter (supplier of inputs/finished goods) under the ILC, for any reason, whatsoever shall not, in any manner absolve us from fulfilment of our obligations as Direct Exporter under the Scheme.

5. We certify that supplies of inputs/finished goods made under the ILC are required and shall be used by us for the manufacture and export of only such commodities which are duly eligible for financing under the Export Finance Scheme as on date of this Undertaking.

6. We hereby confirm and agree that in the event of failure to fulfill any of our obligations under the Export Finance Scheme, you have our irrevocable authority to recover from us and debit our account with fine at the rate prescribed by the State Bank from time to time under the Scheme on the amount of the finance availed by us.

7. We certify and confirm that we have not obtained from any other bank any finance against and on the strength of the above ELC/F.E.0 In the event of a false statement made by us in this behalf, we undertake to be liable to pay fine at the rate prescribed for non-performance under the Export Finance Scheme.

8. We do hereby further understand, confirm and undertake that upon production of documents evidencing supply of goods to us by the Indirect Exporter(s) the liability for the cost of goods so furnished to us by the Indirect Exporter, shall as from the date of such supply, stand in our Name till the realization of proceeds under the Export letter of credit or earlier if so repaid by us. We further confirm and undertake that if the finance obtained by us against the above ELC/EFO is repaid earlier than the expiry date, we shall continue to remain liable to submit to you the relative proof of the shipments under the ELC/F.E.0 referred to above hereinbefore.

                                                                                                                                Authorised Signature of
                                                                                                                                        The Exporter.

Signature verified.

Bank's Authorised Signature.

 

UNDERTAKING TO BE SUBMITTED TO THE INDIRECT

EXPORTF,R AT THE TIME OF OPENING AN INLAND LETTER

OF CREDIT UNDER PART-1 OF THE EXPORT FINANCE SCHEME

(To be furnished on non-judicial stamp paper)

 

The Manager

___________ (Branch)

___________ (Bank)

___________ (Place)

 

Dear Sir,

We do hereby certify and confirm that a finance of Rs ------- has been sanctioned to us by you under the Export Finance Scheme of the SBP on the basis of the following non interest based mode of financing, it being understood that return/profit to be derived by the bank shall not exceed ---- % when converted into annualized percentage:

Mode of financing .

2. We further confirm and undertake that the export financing of Rs -----has been obtained by us against inland letter of credit opened by (name of the banker of the Direct Export) and the same shall be used exclusively to finance the goods concerned in the said inland letter of credit opened on the basis of export letter of credit/export firm order:-

 

Export Latter of Credit/Export firm order

Sr. No. No. Date Amount F. Cy Amount L. Cy
1. 2. 3. 4. 5.

Inland Letter of Credit (ILC)

Sr. No. No. Date Commodity to be

Supplied

Quantity Date of

Delivery

1. 2. 3. 4. 5. 6.

* Specify amount in Foreign Currency/Local Currency, whichever is applicable.

3. We do hereby further undertake to submit to you the following documents for negotiation under the aforesaid Inland Letter of credit against which you have allowed to us the above finance under the Export Finance Scheme.

a) Copy of Invoice.

b) Copy of Truck Receipt/Delivery Receipt.

c) Copy of Goods Received Note/Acknowledgement of goods received by the Direct Exporter.

4. We do hereby confirm and agree that in the event of our failure to affect delivery to (name of the Direct Exporter) on or before the due date of delivery and to sub it the above documents to you within 15 days from the date of delivery, you have our irrecoverable authority to recover from us and debit our account with the fine at the rates prescribed by the SBP from time to time on the amount of finance availed of less the amount of finance in respect of goods delivered to (name of the Direct Exporter) if any, from the date of the original finance. We also undertake and confirm that the payment of such fine shall not absolve us from our liabilities/obligations towards the ( name of the Direct Exporter ) and we shall continue to remain liable for fulfilment of all obligations under the scheme.

5. We do hereby further confirm and undertake that the submission of documents in respect of the above mentioned inland back to back letter of credit will remain our responsibility and we shall provide to you the relevant evidence of delivery of goods to (name of Direct Exporter) and finance so extended to us shall stand adjusted in c n of delivery documents.

 

Signature verified.                                                                              Authorised Signature of the
                                                                                                                Indirect Exporter.

Bank's Authorised Signature.

 

UNDERTAKING TO BE SUBMITTED BY'I'FIE
INDIRECT EXPORTER UNDER PART-11

 

The Manager

_____________ (Branch)
_____________ (Bank)
_____________ (Place)

 

Dear Sir,

We do hereby certify and confirm that a finance of Rs ------- has been sanctioned to us by you under the Export Finance Scheme of the SBP on the basis of the following non interest based mode of financing, it being understood that return/profit to be derived by the bank shall not exceed ----- % when converted into annualized percentage: -

Mode of financing

  1. We further confirm and undertake that the export financing of Rs.________has been obtained by us against inland letter of credit opened by (name of the banker) & (Name of the Direct Exporter) out of the borrowing

entitlement of Direct Exporter concerned, and the same shall be used exclusively to finance the goods mentioned in

the inland letter of credit opened on the basis of export letter of credit/export firm order, mentioned as follows:-

Export Letter of Credit/Export firm order

S.NO. No. Date Amount
F. Cy
Amount
L. Cy
1 2 3 4 5

Inland Letter of Credit (ILC)

No. Date Amount Commodity to be
supplied
Date of
Delivery
1 2 3 4 5

* Specify amount in Foreign Currency/Local Currency, whichever is applicable.

3. We do hereby further undertake to submit to you the following documents for negotiation under the aforesaid Inland Letter of credit against which you have allowed to us the above finance under the Export Finance Scheme.

a) Copy of Invoice.

b) Copy of Truck Receipt/Delivery Receipt.

c) Copy of Goods Received Note/Acknowledgement of goods received by the Direct Exporter.

4. We do hereby confirm and agree that in the event of our failure to affect delivery to (name of the Direct Exporter) on or before the due date of delivery and to submit the above documents to you within 15 days from the date of delivery, you have our irrecoverable authority to recover from us and debit our account with the fine at the rates prescribed by the SBP from time to time on the amount of finance availed of less the amount of finance in respect of goods delivered to (name of the Direct Exporter) if any, from the date of the original finance. We also undertake and confirm that the payment of such fine shall not absolve us from our liabilities/obligations towards the (name of the Direct Exporter) and we shall continue to remain liable for fulfilment of all obligations under the scheme.

5. We do hereby further confirm and undertake that the submission of documents in respect of the above mentioned inland letter of credit will remain our responsibility and we shall provide to you the relevant evidence of delivery of goods to (name of Direct Exporter) and the finance so extended to us shall stand adjusted in our name on submission of delivery documents

 

Signature verified.                                                                                                           Authorised Signature of the
                                                                                                                                             Indirect Exporter.

Bank's Authorised Signature.

Form DE-1

PARTICULARS SHOWING THE STAGES OF COMPLETION OF
THE PRODUCT TO BE EXPORTED BY TLIE DIRECT EXPORTER

1. Name of the Direct Exporter.

2. Address.

2 a. Nature of the operation Manufacturing/Semi Manufacturing / Trading. Name of the Foreign Buyer.

4. Address

5. L/C No./Firm Export Order No.

6. Date of LC/Firm Export Order.

7. Amount of the LC/Firin Export Order. Amount of finance required.

8 a. Amount(s) and date(s) of finance already obtained, if any, against the above LC/FEO.

9. Description of commodity to

be exported. Description/Total quantity/Amount.

10. Quantity and Amount of Commodity to be exported now.

11. Manufacturing requirements.

Purchase of inputs from local suppliers.

Purchase of inputs from Foreign suppliers.

Value addition on purchased inputs.

Total :_____________________

Details of manufacturing requirements.

A: Local Inputs.

 

Sr.
No.

Name of
Indirect
Exporter
Commodity
Purchased /
To be
purchased
Estimated
Delivery
date
Estimated No. of
Days from date of
Opening of ILC
Quantity Amount

1.

2.

3.

4.

B : Foreign Inputs *

S. No. Name of
Foreign
Supplier/C
Omm.
Importers.
Country Commodity Estimated
date by
which L/C
will be
opened
Estimated
Delivery
Period
Quantity Amount in
Foreign
Currency
Eqvlt.
Pak Rs.

1.

2.

3.

C: Value addition.

(Inclusive of Freight, Insurance, other overheads

and Profit margin)

Amount in F.C. =

Amount in Rs. =

  1. tails of financial requirements i.e. (A+C)

a) For supplies of Local Inputs by. Amount Period No. of days.

Indirect Export No. 1

No. 2

No. 3

b) For Value addition Amount Period No. of days.

By the Direct Exporter.

  Certified that the contents of this statements are correct to the best of our knowledge & belief.

                                                                                                            Signature of Direct Exporter
                                                                                                                                (Seal)

 

 

Counter signature by the
Bank of the Direct Exporter.

* Please attach the information in the form of separate Annexure for more than 3 IDEs/ foreign suppliers.

Form "DE – 2"

CERTIFICATE SUBMITTED BY DIRECT EXPORTER/UNDER
PART 1 OF THE EXPORT FINANCING SCHEME

 

We do hereby certify that we have neither obtained any finance nor have authorised any other bank to open any ILC in Pakistan except against the Export Letter of Credit (ELC)/Firm Export Order (FEO) mentioned hereunder

ELC No. ____________________ Dt. ______________________ Amount.___________

FEO No. ____________________ Dt. ______________________ Amount.___________

List of ILCs issued to indirect exporters :-

Sr. No. Name & Address of the Indirect
Exporter.
No. & Date of ILC Value of ILC
1. 2. 3. 4.

 

Dated : ______________________

Place : ______________________                                                                              Authorised Signatures

                                                                                                                                        (Direct Exporter)

Authorised Signatory of Bank.

 

Form "DE – 3"

 

APPLICATION FORM OF THE DIRECT EXPORTER GIVING PARTICULARS OF BORROWING LIMIT (AS PER FORM EE-1) AND THE FINANCIAL EQUIREMENTS AGAINST IMPORTED INPUTS AND THE LOCAL SUPPLIES FROM THE INDIRECT EXPORTERS.

 

1. Name of the Direct Exporter.

2. Address.

3. Nature of the operation. Manufacturing/Semi Manufacturing/Trading

4. Commodities to be exported.

5. Entitlement of limit for finance/refinance through the financing bank.

6. List of IDEs to whom following

ILCs have been opened or payment have been made through cheqtie(s) and honored. Entitlement for limit shall be allowed to the extent of accounts of LC(s) opened only:-

Name of IDE                         ILC No.                         Amount of ILC

 

1.

2.

3.

                                                                                                                                        Total Rs._____________

 

7. Balance amount of limit (5 - 6) __________________

8. Borrowing entitlement as per 7 above _______________________

9. Amount of export finance already availed of by DE. ___________________

10. Amount of unutilized limit, if any, (8 - 9). ___________________

11. Details of value addition.

A: Local Inputs *

Sr. No Name of Indirect
Exporter
Commodity
Purchased /
To be
Purchased
Estimated
Delivery
Date
Estimated No.
Of days of
Opening of ILC
Quantity Amount

1.

2.

3.

B: Foreign Inputs *

S. No Name of Foreign Supplier /C Omm. Importers. Country Commodity Estimated Date by Which L/C Will be opened Estimated
Delivery Period
Quantity Amount in
Foreign
currency
Eqvlt.
Pk
Rs

1.

2.

3.

C: Value addition Amount in Rupees_______________________

12. Amount of loan presently required.

Certified that the contents of this statements are correct to the best of our knowledge & belief.

Signature of DE

Counter Signature by the

Authorised Dealer/Bank of the DE.

* Please attach the information in a separate Annexure for more than 3

Indirect exporters/Foreign suppliers.

NEGATIVE LIS’

LIST OF COMMODITIES INDICATING THEIR SPECIFIC HARMONIZED CODES NOT
ELIGIBEL FOR CONCESSIONARY EXPORT FINANCE UNDER THE EXPORT FINANCE
SCHEME

S. No.

Commodity

Harmonised Code

Main HC ITC

Sub Heading No.

1

Raw Cotton
(Excluding Surgical Bleached/Absorbent)

52.01
52.02

5203.00
1404.20

2

Cotton Yarn (excluding Cotton Sewing Thread Blended yarn with 49% cotton, Dyed Yarn & Yarn of count 30 and above).

52.05
52.06

5207.1000
5207.9000

3

Fish other than frozen ad preserved

03.01
03.02

 

4

Mutton and Beef

02.01
02.02
02.04
02.06
02.08
16.02

1607.00



(Excl. Frog Legs)
0208.20

5

Petroelum Products

27.08
27.10
27.11
27.12
27.13
27.14

2709.00
2715.00



6

Crude Vegetable materials n.e.s. (Excluding Floricultural & Horticultural Products)

06.01
06.02
06.03
06.04
12.11
12.14

13.01

13.02
14.01
14.02
14.03
14.04

1213.00



(Excl. Rose Bud/Flower)
(Excl. Sassafrass Leaves)
(Excl. Guar Gum Extract/Guar Protein)




7

Wool & Animal Hair

05.02
05.03
51.01
51.02
51.03
51.04
51.05







(Excl. Wool Tops (5105.29))

8

Crude Animal Material

04.07
04.08
05.04

05.05
05.06
05.07
05.08
05.09
05.10
05.11



(Excl. Animal Casing & Fatends

9

Feed Stuff & Animals

23.01
23.02
23.09

 

10

All Grains including Grain Floor




* in Packets of 1-50 Kgs.

10.01
10.02
10.03
10.04
10.05
10.06


10.07






(Excl. Packeted Irri/ Basmati Rice with brand names*)

11

Stone, Sand and Gravel

25.05
25.06

25.15
15.16
25.17
25.20

2507.00
2514.00
2521.00

12

Waste & Scrap of Kinds

23.03
23.04
23.05
23.06
23.07
23.08
26.18
26.19
26.20
26.21
39.15
41.10
47.07
55.05
71.12
72.14
74.04

5301.30 (Excl. Rice Gluten for 1998-99 only)


5703.00
7602.00
7802.00
7902.00
8002.00

13

Fertilizer Crude

25.10

3101.00
3102.50
3104.10

14

Oil Seeds, Nut & Kernels

12.01
12.02
12.03
12.04
12.05
12.06
12.07
12.02

 

15

Jewellery exported under the entrustment scheme

 

 

16

Live Animals

01.01
01.02
01.03
01.04
01.05
01.06





(Excl. Hatching Eggs & Day Old Chicks)

17

Hides & Skins

41.01
41.02
41.03

 

18

Leather Wet Blue

41.04
41.05
41.06
41.07

4104.21 to 4104.29
4105.11 to 4105.19
4106.11 to 4106.19
4107.21

19

Inorganic Elements Oxides etc.

28.01
28.04
28.05


28.09
28.10
28.11
28.14
28.15
28.16
28.17
28.18
28.19
28.20
28.21
28.24
28.25
28.44
28.45
28.46
28.47
75.01

2802.00
2803.00
2817.00
2800.00
2823.00
(Excl. Inorganic Acids)
- do -
- do -

20

Coal & Minerals




25.03
25.04
25.07
25.08
25.09
25.11
25.12
25.18
25.19
25.22
25.25
25.26
25.27
25.28
25.29
25.30
27.01
27.02
27.03

2501.00 (Excl Refined/ Treated salt)
25502.00

21

Work of Arts and Antiques

97.01
97.05

9702.00
9703.00
9704.00
9706.00

22

All Metals (Excluding Magnesite in the processed form

Excluding Blister Copper (26.03 & 74.01)






Excluding Chrome concentrates in the processed form (26.10)

26.01
26.02
26.03
26.04
26.05
26.06
26.07
26.08
26.09
26.10

26.11
26.12
26.13
26.14
26.15
26.16
26.17
74.01
75.01



















(Excl. Blister copper)

23

Fur Skins

43.01
43.02
43.03

 

24

Wood in rough or squared

44.01
44.02
44.03
44.04
44.05
44.06
44.07
44.08
44.09