KARACHI, Sept 22: The State Bank may come up with an improved version of its scheme for financing locally manufactured machinery. The SBP is reframing the scheme to make it simpler and tag it with a more market-oriented interest rate, said a senior State Bank official.

A SBP circular issued to all banks on Monday said that for the time being the rates of finance/refinance announced in March this year would continue to apply on financing under this scheme. The circular further said that the scheme in its present form may not bring in “the desired impetus for the industrial growth of the country.” It said the SBP has started modifying the scheme that may be finalized by December.

Senior bankers reached by Dawn said that the SBP had permitted banks to charge a maximum annual markup of 7 per cent on financing made under LMM. And it had told them that the central bank would provide refinance against such financing at 5 per cent thus enabling them to earn a maximum spread of 2 per cent.