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SBP extends time for settlement of foreign currency loans

SBP extends time for settlement of foreign currency loans

KARACHI: State Bank of Pakistan (SBP) facilitated the exporters and importers by allowing extension up to 180 days in settlement of their export and import loans under FE-25 Scheme due to COVID-19 pandemic.

Providing the details of the facility in a statement released by the SBP, the banks can now allow extension of upto 180 days to exporters in settlement of their FE-25 loans in case they are facing delay in realization of export proceeds due to COVID-19.

Moreover, banks can also allow settlement of FE-25 loans to exporters through substitute contract during the extended period of 180 days where the original export contract has been cancelled due to COVID-19.

Likewise, SBP has also allowed the bank to extend the maturity of FE-25 import loans by 180 days. This facilitation has been provided to exporter and importers for their foreign currency loans maturing upto September 30.

It is pertinent to mention here that a day before, State Bank of Pakistan (SBP) enhanced the limit of refinancing provided to the banks under Exports Finance Scheme (EFS) by Rs100 billion.

The banks will now have overall limits of Rs700 billion for the exporters for the ongoing fiscal year 2020-21, the central bank said in a statement.

The State Bank of Pakistan (SBP) announced that to promote export-oriented investment, Rs90 billion have also been allocated under Long Term Financing Facility (LTFF) for the ongoing fiscal year.

“This amount is, in addition, to limit of Rs100 billion already allocated to banks/DFIs under Temporary Economic Relief Facility (TERF) – a concessionary refinance scheme for setting up of industrial units,” the SBP release said.