LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has appealed to Dr. Gohar Ejaz, the Federal Minister for Commerce, to urgently address the concerns raised by exporters regarding the newly issued guidelines to banks concerning the SBP Refinance Scheme.
“The new guidelines are poised to significantly impact exporters, exacerbating the challenges faced by our already struggling economy,” stated Kashif Anwar, President of the LCCI. This call to action comes in response to a series of grievances lodged by LCCI members.
Anwar stressed that numerous firms within the LCCI representing the export sector are grappling with serious complications arising from the recent guidelines conveyed to banks concerning the SBP Refinance Schemes. Recognizing exporters as the backbone of the nation’s economy, he stressed the critical importance of promptly addressing their concerns, especially during these trying times.
Anwar revealed that commercial banks are notifying exporters about directives from the State Bank of Pakistan (SBP) that compel them to reduce the disbursed funds to exporters against their export limits exposure for refinancing by August 31, 2023, during the extension of credit limits. Consequently, exporters are faced with a dilemma: either repay the funds before the aforementioned date or obtain them from commercial banks at a rate of 25% (comprising 22% KIBOR and 3% Banker Spread).
Anwar expressed deep concern over the potential repercussions of this measure on an already burdened Export Sector. He argued that complying with such short-notice instructions would prove immensely challenging for exporters who are already meeting the criteria set by the State Bank. Furthermore, he highlighted that many exporters are still awaiting approval of their EE Statements, a process currently underway at the State Bank. Anwar questioned the fairness of curtailing their limits without considering their performance, particularly given the dire economic circumstances.
He pointed out that the refinancing rate for exporters had incrementally risen from 3% to 19% over the past two years, purportedly due to inflation-based increments. Despite grappling with this substantial increase, exporters were striving to cope. However, Anwar contended that the new curtailment policy would severely hamper their working capital capacities and elevate the cost of conducting business, thereby eroding their ability to compete with international suppliers.
“The proposed policy change risks undermining the slight advantage that the Export Sector currently holds. We firmly believe that such shifts in policy should be undertaken after thorough consultation and consensus among private sector stakeholders,” asserted the LCCI President. He urged Dr. Gohar Ejaz, the Federal Minister for Commerce, to reconsider this policy alteration and adopt a more equitable approach that duly recognizes the challenges faced by exporters. Anwar firmly believed that a fair and supportive policy stance would not only aid exporters but also contribute significantly to the broader economic growth of the nation.
