KARACHI: State Bank Governor Salim Raza on Wednesday assured exporters that ample liquidity would be available for export-oriented sector, while the refinancing limit has been increased by 58 per cent compared to last year.

Speaking to industrialists and traders at the Karachi Chamber of Commerce and Industry (KCCI) he said that the refinance limit at Rs221 billion assigned to various banks for current 2009-10 fiscal year (FY10) is 58 per cent higher than limits on June 30, 2008.

‘We are continuously monitoring the availability of credit under this key source of financing to the export sector to ensure that exporters do not suffer on account of lack of funds,’ he added.

Mr Raza said that the SBP had taken a number of measures to provide liquidity to corporate entities at low interest rates.

Talking about specific incentives for the export-oriented sector, the SBP governor said that since January this year the central bank had given additional concessions under its refinance schemes.

He pointed out that some of the significant incentives include one-year grace period on principal amount repayments, debt-swap for non-textile sector, refinance for second-hand plants and machinery as well as for generators and captive power plants under the long-term financing facility.

Similarly, under the export finance scheme incentives and relaxations pertaining to performance-based mark-up rates, extension in repayment period under Part-I of EFS and relaxation in export proceeds over-dues were introduced.

Referring to a point regarding remedial measures to reduce adverse impact of economic slowdown on financial sector, Mr. Raza said the State Bank had taken measures to effectively handle the impact of economic slowdown on financial sector.

Accordingly, minimum capital requirement for banks and DFIs has been lowered, provisioning requirement has been rationalised to withstand the impact of economic recession and facilitating bank lending to businesses, introduced interim guidelines for encouraging banks to reschedule/restructure the facilities for promising borrowers.

The other measures include reduction in Cash Reserve Ratio, liquidity support, incentive for mobilisation of long-term funds, and effective communication policy that was well amplified by SBP’s strong track record of ensuring a sound and stable banking system.