KARACHI, Aug 29: The State Bank of Pakistan (SBP) has relaxed the entitlement of Export Finance Scheme (EFS) for exporters of leather garments and leather products.

A decision to this effect was taken when a four-member delegation of Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA) met SBP Governor Dr Ishrat Hussain here on Wednesday.

The PLGMEA delegation, led by its acting chairman M Saleem Ahmed, apprised the SBP governor of problems being faced by the exporters of leather garments and leather products.

Saleem pointed out to the SBP governor that exports of leather garments were falling sharply and there was an urgent need to address the problems being faced by exporters of leather garments.

He said exporters are facing difficulties with their banks regarding their entitlement of Export Finance Scheme (EFS) since they could not meet the performance target set for the year 2001-02.

The delegation suggested to the SBP governor that the entitlement of export finance for the fiscal year 2002-03 be allowed on the basis of EE statement of Rs1.50 for availing export finance of Re1 instead of existing EE of Rs2. The governor immediately accepted the proposal of the delegation.

It was also pointed out to the SBP governor that exporters of leather garments were not able to reduce their export refinance limits with the banks for subsequent year since their funds were already blocked in the stocks of leather and leather garments. Therefore, the limit of these exporters should be adjusted accordingly to accommodate their financial requirements.

The governor considered this issue very thoroughly and it was decided that the entitlement limit be enhanced from existing 50 per cent to 67 per cent for exporters of leather garments and leather products for the monitoring year 2002-03 on the basis of export proceeds realized last year.

As a result of the development the concerned authorities were notified about this facility and necessary instructions were issued to all area offices of the State Bank.