SBP Refinance Scheme: LCCI urges Gohar to ease exporters’ concerns about new guidelines

LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has urged the Federal Minister for Commerce Dr Gohar Ejaz to immediately resolve the grievances of the exporters regarding new guidelines communicated to banks about SBP Refinance Scheme.

“New guidelines are bound to hit the exporters hard besides adding to the miseries of the already dwindling economy,” President of the Lahore Chamber of Commerce and Industry Kashif Anwar said in a letter written to the Federal Minister for Commerce after receiving various complaints from LCCI members.

The LCCI president said that the LCCI member firms representing export sector are facing serious issues with regard to new guidelines communicated to banks about SBP Refinance Schemes. The exporters are the economic backbone of our country and we must address their issues on priority basis particularly at the moment when they are facing quite tough time.

He said that the commercial banks are informing the exporters about the information circulated by the SBP which is binding them to reduce the released funds to exporters against the export limits exposure for refinancing on August 31, 2023 at the time of rolling-over the extended credit limits. By virtue of this act, they are asking either to pay back funds before above-mentioned date or commercial banks will provide them from their own sources at the rate of 25% (22% KIBOR + 3 % Banker Spread).

Kashif Anwar said that this act will seriously damage our Export Sector which is already under huge burden. It could be impossible for the Exporters, who are already meeting the criteria set by the State Bank, to follow the new instructions on such short notice.

He added that at the same-time, most of the exporters have not received their approved EE Statements which are still in process with the State Bank. So would it be fair enough to curtail their limits without considering their performance even in such miserable economic conditions. He said that refinancing rate for exporters has been increased from 3% to 19% gradually within last two years with the arguments of inflation based increment, somehow exporters were still trying to manage this massive increase but this new policy of curtailment will do severe damages to their working capital capabilities and cost of doing business to compete with international suppliers.

“This would disrupt the slight leverage available to the Export Sector. We are of the concerted opinion that such policy shifts ought to be taken through due deliberation and consensus of the private sector stakeholders,” the LCCI president said and urged the Federal Minister for Commerce Dr Gohar Ejaz to reconsider this policy change and find a more balanced approach that takes into account the challenges faced by exporters. He believed that a fair and supportive policy will not only help exporters but also contribute to the overall economic growth of the country.

Copyright Business Recorder, 2023