KARACHI, Jan 31: The State Bank has decided to cut the rate of refinance under the Export Finance Scheme (EFS) by 0.1 percentage point from Friday.

This is the second rate cut announced by SBP in a month. Earlier, it had reduced the refinance rate by 0.2 percentage point.

“It has been decided that rate of refinance under the Export Finance Scheme applicable from February 1, 2013 and onward will be 8.20 per cent per annum till further instructions,” said a SBP circular issued on Thursday.

The commercial banks will ensure that where financing facilities are extended by them to the exporters for availing refinance facilities under the Export Finance Scheme, their maximum margin or spread does not exceed one per cent.

The revised reduced markup rate would also be applicable on outstanding loans granted under EFS. Accordingly, banks have been advised by SBP to immediately re-price their outstanding loans granted under EFS, keeping in view the revised reduced markup rate.

Simultaneously SBP BSC offices would also apply reduced markup on outstanding refinance loans granted under EFS, said the SBP.

In order to reconcile the position of re-priced loans, banks should submit particulars of outstanding loans re-priced by the bank under EFS to the State Bank within 10 days from today (Thursday).

The reimbursement of mark-up rate benefit to exporters, on excess performance under Part-II of the Scheme will be adjusted accordingly while keeping in view the revised mark-up rates, the SBP circular added.