KARACHI: The State Bank on Monday decided to increase maximum financing limit to a single export-oriented project under the Long Term Financing Facility (LTFF) scheme for plant and machinery.The limit has been increased from Rs1,000 million to Rs1,500 million, said a circular issued by the SBP to all banks and development financial institutions (DFIs).

However, banks and DFIs may continue to provide financing facilities as per their credit policies over and above the said maximum limit from their own sources, said the SBP.

The State Bank through another circular announced that banks and DFIs may entertain financing requests of new project or expansion and BMR of existing projects on the basis of projected exports based on the criteria specified by the SBP.

According to details, minimum export target [annual exports of $5 million or 50 per cent of sales, whichever is lower] will be met within a maximum period of four years, from the date of grant of refinance from SBP, in a phased manner.

In the first phase, 40 per cent of the export target would be required to be met in first two years while the remaining 60 per cent target would be met during the next two years or total tenor of loan, whichever is less.

Minimum export target has been set as in first two years 40 per cent annual export of $2 million or 20 per cent of sales, whichever is lower.

Next two years, 60 per cent annual exports of $3 million or 30 per cent of sales, whichever is lower, has been set.

Annual export of $5 million or 50 per cent of sales, whichever is lower is the criteria.

In the case of failure to meet the above mentioned projected export targets, fine will be imposed as prescribed under the specific circular issued by the SBP in April 2010, said the State Bank.