KARACHI: Chaudhry Salamat Ali, Central Chairman, Pakistan Hosiery Manufacturers & Exporters Association (PHMA) has said that in view of global slowdown and deadly effects of COVID-19 on the business in Pakistan and to facilitate the exporters in respect to their increasing need of export refinancing, it is direly need that the State Bank of Pakistan must consider reallocation/upward revision of sanction limit to the Authorized Banks, says a Press release.
In this connection, he said, SBP, in view of exporters clientele maintained by the respective bank and their export profile, should consider to further increase the sanction limit to cater the bank’s client needs and to facilitate the exporters in this most severe liquidity crisis.
In his letter to Dr Reza Baqir, Governor, State Bank of Pakistan (SBP), Chaudhry Salamat Ali has appreciated recent facilitation schemes being announced by SBP to the industries to provide relief in the wake of global slowdown and disastrous effects caused by COVID-19. PHMA Central Chairman invited immediate favourable attention of SBP Governor towards Export Finance Scheme (EFS) which are in operation since 1973 with the objective to boost the exports of the country where short term financing facilities are provided to exporters through banks for exports of value added manufactured goods made in Pakistan.
Salamat Ali apprised that various member exporters have approached PHMA stating that their banks have shown their inability to meet the demand for credit with regards to export refinancing owing to exhaustion of sanctioned limit approved by the State Bank of Pakistan. Similarly, exporters are also compelled to avail KIBOR based facilities from commercial banks even in presence of their approved EFS exposure limits with respective banks.
He has asserted upon the need to enhance the SBP’s sanctioned limit of export refinancing by banks to the Exports in order to support and facilitate them as currently the Textile exporters were facing severe liquidity crunch and hardships owing to cut-throat competition, exorbitant cost of manufacturing and doing business and imposition of Sales Tax by the Government and lockdown due to COVID-19.
Chaudhry Salamat Ali demanded the Governor State Bank of Pakistan to accord favourable considerations and review the Export Finance Scheme Policy (EFS) and genuinely consider and approve reallocation of sanction limit to Authorized Banks suffice to meet the demand for credit from exporters in respect to Export Refinancing in order to facilitate them which will ultimately enhance exports of Pakistan and shall act instrumental in earning more foreign exchange for our beloved country.