January 22, 2002	Tuesday	Ziqa’ad 7, 1422

KARACHI, Jan 21: Habib Bank Ltd (HBL) will provide pre-shipment finance in US dollars to its customers against Letters of Credit (LCs) or firm contracts for up to a maximum period of 180 days.

Addressing a press conference at Habib Bank Plaza on Monday, HBL president Zakir Mahamood said the bank will provide dollar financing equivalent to Rs2.5 billion under the scheme. Repayment of the finances will be from export proceeds, he added.

HBL will fund dollar requirements from its own resources, i.e., dollar deposits under FE 25 scheme. The bank, at present have around $200 million under FE 25 deposits, he told the reporters.

Answering a question, he said the pricing will depend on market conditions and will vary for individual customers. However, he said the bank is offering the dollars financing almost 3 per cent cheaper than the permissible rate of State Bank of Pakistan. He said the SBP base rate is 8 per cent and it allows the banks to charge 1.5 per cent over the base rate, totalling 9.5 per cent while the HBL will offer financing under this scheme, in most cases around 6.5 per cent.

He said HBL is the first in offering dollar financing to the exporters to enable them boost exports and help them become competitive at the global level. He said, “HBL is the largest financier of exporters in the banking sector and this new facility is in line with its continuing policy of providing maximum support to promote exports which are vital for the economy”.

He said a special feature of the new facility is that Rs1 billion is dedicated to Small and Medium Enterprises through HBL’s 21 commercial branches which serve medium sized exporters.

He said the Ministry of Finance and the SBP has encouraged the bank for taking this initiative and hoped it will supplement the effort of the government and SBP to boost exports.—APP