SBP BSC (Bank) 1

Export Refinance Operations Manual – Part-II

EXPORT REFINANCE
OPERATIONS MANUAL
PART-I

December 2015

DEVELOPMENT FINANCE SUPPORT DEPARTMENT

STATE BANK OF PAKISTAN
SBP BANKING SERVICES CORPORATION (BANK)
DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Preface

Considering the need to ensure uniformity in EFS operations carried out at SBP BSC offices,
capacity building and facilitating the learning of existing and new incumbents, details of almost
all necessary operational procedures involved from the grant of loan under EFS to its expiry and
submission of required documents have been incorporated in this document.

For convenience of users, information contained in each component of all the necessary
documents has been explained and a checklist has been developed to assist officials in carrying
out the scrutiny of these documents. Screenshots of EFS Globus Module have also been included
to facilitate system related tasks and workflow charts are added to provide a quick reference to
all steps and procedures involved.

All procedures described are in line with the SBP instructions issued on the subject. Efforts have
been made to incorporate maximum information available. The reference documents used are;
the book of guidelines on Export Finance Scheme issued by IH&SMEFD, SBP (March 2012),
various circulars and circular letters issued on the subject by IH&SMEFD, SBP and review of
the existing practices at SBP BSC offices engaged in EFS operations.

Disclaimer

The information contained herein is for the guidance of SBP BSC officials on the subject and in
no way substitutes the specific policy instructions on the Export Finance Scheme issued from
time to time by Infrastructure, Housing & SME Finance Department, State Bank of Pakistan.
Any deviation found herein shall invariably be reported to us for clarification at our end.
DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

The Team

Syed Shahzad Safdar Zaidi

Director

Faisal Shafaat
Senior Joint Director

Muhammad Adeel Khan

Deputy Director

Almazia Shahzad
Assistant Director
DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Contents

Glossary ......................................................................................................................................... ..
List of Acronyms ........................................................................................................................... ..
I. Introduction of Export Finance Scheme Part-I .............................................................. 1
II. Grant of Loan ..................................................................................................................... 2
1. Scrutiny ............................................................................................................................... 2
2. Inputting & Authorization of Refinance .............................................................................. 6
3. Additional Required Document: Debit Authority ................................................................ 9
III. Submission of Documents................................................................................................ 10
1. Submission of Shipping Documents .................................................................................. 10
2. Submission of Export Proceeds Realization Certificate (EPRC) ....................................... 13
IV. Fines and Refund ............................................................................................................. 16
1. Fines under EFS Part-I ....................................................................................................... 16
2. Refund of Fine .................................................................................................................... 18
EFS PART- I - WORKFLOW CHARTS ................................................................................. 19
Grant of Loan ............................................................................................................................ 20
Submission of Shipping Documents ......................................................................................... 21
Submission of Export Proceeds Realization Certificate ........................................................... 22
Refund of Fine........................................................................................................................... 23
DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Glossary

A-1/O-1 A type of schedule/document that is used for reporting final realization of

all export proceeds by the bank.

A-2/O-2 A type of schedule/document that is used for reporting advance/part

payments for exports by the bank.

Annexure-D Proof of shipment submitted by the bank on behalf of the exporter to

concerned SBP BSC office, against refinance obtained under EFS Part-I.

Direct Exporter An entity which manufactures and exports, or a trading company who
procures and exports.

DP Note A Demand Promissory Note (DP Note) is a negotiable financial instrument

through which the borrower makes a promise to pay back the lender a
certain amount of money on demand at a specified time. In the context of
EFS it serves as an evidence of acceptance of refinance contract by the
exporter and AD.

EPRC Export Proceeds Realization Certificate (EPRC) is a proof of realization of

export proceeds in Pakistan against the loan availed by the exporter under
EFS Part-I. It is submitted by the bank on behalf of the exporter to
concerned SBP BSC office.
Export Overdue A document that shows the amount due to be realized by exporter against all
Certificate exports made in the relevant fiscal year.

Form D Application for refinance submitted by the bank/AD against financing

provided to an exporter under EFS Part-II.

HS Code Harmonized System Code (HS Code) is an internationally standardized

system of names and numbers to classify traded products.

ILC Inland Letter of Credit (ILC) is is issued to meet out the credit requirement
for domestic trade. Under EFS it is the Direct Exporter to an Indirect
Exporter to provide inputs necessary for export purpose.

Indirect A manufacturer or supplier of goods or materials which are to be used as

Exporter inputs for exports by Director Exporter.
DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

List of Acronyms

AD Authorized Dealer, i.e. Commercial Bank

DP Note Demand Promissory Note

EDS Charges Export Development Surcharge Charges

EFS Export Finance Scheme

FC Charges Foreign Currency Charges

FOB Freight on Board

HS Code Harmonized System Code

IMU Internal Monitoring Unit

ILC Inland Letter of Credit

L/C Letter of Credit

LD Loan Demand (used in Globus for

Transaction ID)

LSSD Late Submission of Shipping Documents

NTN National Tax Number

SPO Standard Purchase Order

TAT Turnaround Time

WHT Withholding Tax

DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

EXPORT FINANCE SCHEME

PART-I
DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

I. Introduction of Export Finance Scheme Part-I

EFS Part‐I is a transaction based facility. Annual financial limits are allocated to Commercial
Banks on revolving basis by IH & SMEFD, SBP Karachi through BSC offices for providing
finance to their clients (exporters). Banks / ADs having EFS limits provide export finance to the
exporters at pre‐shipment and/or post‐shipment stage on case to case basis against Letter of
Credit/Contract for export of eligible goods. Indirect exporter/manufacture, who supply inputs to
direct exporter can also avail the facility against Inland Letters of Credit/Standardized Purchase
Order established by direct exporter. The mark‐up rate has been linked with the weighted
average yields on six months T‐Bills w.e.f. 2001. Currently, mark‐up rate under EFS for the
borrower stands at 4.5% (banks get re‐finance from SBP at 3.5% and are permitted a maximum
spread of 1% for corporate & 2% for SME).

After financing, the request for refinance is submitted by AD / bank to relevant SBP BSC office
where authorized dealer / bank has revolving refinance limit. The turnaround time (TAT) for
refinance to AD / bank is 48 hours of submission of application subject to that the submitted
application is correct. Period of financing for direct exporter is 180 days under EFS; however,
after a major modification in Scheme, Exporter can opt for a rollover facility for further 90 days
subject to showing performance equivalent to 117% of the borrowed amount. While the period
of Financing for Indirect Exporter is up to 120 days only. However, where facilities against a
particular L.C. / contract/firm export order are availed by both Direct and Indirect Exporter, the
combined period shall not exceed 180 days. Banks take the credit risk under the scheme, and
SBP takes exposure on banks. In case the borrower fails to make repayment of the loan on the
due date, the bank is entitled to charge normal rate of mark up on such overdue principal
amounts besides taking other actions to recover the same. However, the refinance extended by
SBP‐BSC offices to the banks is recovered on the due dates as per repayment schedule from the
account of the banks/DFIs at respective SBP BSC office. As such, the repayment of EFS loans to
SBP is not dependent upon the recovery of loan from the borrower. Hence, ultimate credit risk
under the Scheme is borne by the lending banks.

The Exporter is required to submit proof of shipment ( Annexure-D) within 30 days from the
expiry of loan period in case of pre‐shipment loan, after shipment the proof of realization of
exports proceeds ( EPRC) is to be provided by exporter within 210 days (300 days for carpet
exporters from the date of shipment). If not done so the fine at prescribed rate is charged to
banks for its exporter, which is refundable upon submission of required documents in some
cases; some fines are completely refundable i.e. fine of non-shipment, and fine of short shipment
in case of providing additional Annexure-D, some type of fines are partially refundable i.e. fine
of non submission of EPRC and some type of fines are not refundable i.e. fine of delayed
repayment, fine of late submission of shipping documents (LSSD).

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

II. Grant of Loan

Once authorized dealers provide financing to exporters under Part-I, a loan grant application is
submitted to the relevant SBP BSC Office in order to obtain refinancing from SBP. These loan
grant applications have to be processed within 48 hours of receipt. Following steps are
involved in the grant of loans under Part-II of the Export Finance Scheme:

1. Scrutiny

Once a grant application is received, it is scrutinized for detection of discrepancies. If any

discrepancy is found, it is returned to the authorized dealer for correction otherwise it is
considered as clear and loan is granted against it.

Steps for Scrutiny of Grant Application:

 Check whether or not limit is available with the bank; and if it is available, whether or not it
covers the loan amount.

Checklist Explanation
Bank’s Limit in the concerned SBP BSC
1. Bank’s Limit office is checked through Globus. If limit in
respect of applicant bank is less than loan
amount applied, grant is not admissible.

 Check that all required documents stated below are submitted along with the grant
application:

Document: Form-D
Checklist Explanation
1. Name of Branch Name of branch is confirmed; either Main branch or
Sub Branch
2. Name of Exporter Name of exporter who is going to avail refinance
facility
3. Address of Exporter Complete address of exporter and its business
location
4. Type of Exporter Either direct or indirect exporter

5. NTN Number National Tax registration Number of exporter

6. Export Registration Whether the exporter is registered or not.

Number

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Document: Form-D
Checklist Explanation
7. Nature of Business In what type of business exporter is involved e.g.
Manufacturing, Trading, Export etc
8. Particulars of Document(s) i- Refinance has been claimed either against LC/
against which finance is ILC/SPO/Contract
provided ii- Name of the importer
iii- No. of the Contract & Date
iv- Currency involved in contract, exchange rate
on finance date and its equivalent amount
(contract value must not be less than the loan
amount otherwise grant would not be allowed)
9. Amount of Finance Refinance amount to bank must not exceed the
amount financed to exporter.
10. Date of Finance Date of Financing to exporter and the date on D.P
Note must be same
11. Rate of Finance Finance has been provided to exporter on specified
rate including bank spread as per circular issued by
SBP in this regard
12. Commodity What commodity is being exported? Either HS Code
provided against said commodity is correct or not.
Moreover to confirm commodity does not include in
Negative List of Export
13. In case of Post Shipment In case of post shipment, the shipment date should
following are checked: be earlier than the date of finance. Further the E-
a) Date(s) of shipment form provided with documents should be valid and
b) E-Forms No cover the value of contract amount. Exporter cannot
c) Invoice Value avail Finance facility more than the invoice value.
d) Due date of realization Realization has not been made
of export bill(s)
14. Destination The country where the commodity is to be exported.
It must be ensured that exports should not be to such
country, which Government of Pakistan has banned
to export.
15. Due Date of Shipment In case of Pre-Shipment case due date of shipment
must be future date
In case of Post-Shipment case shipment should have
already been made

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Document: Form-D
Checklist Explanation
16. Due Date of Repayment of AD has to repay the loan amount within 180 days of
Refinance date of Grant as per instructions by SBP

17. Amount of finance already Detail of all the finance that exporter has already
been availed by exporter availed against same contract against which now
against contract refinance is being claimed may be provided. Total
amount availed against any contract must not exceed
its total value.
18. Amount of Refinance It must not exceed the amount actually granted by
requested AD to the exporter.

19. Amount of Overdue Bill in If overdue export position of an exporter is greater

case exporter is not than 5% of the previous year’s exports shown in EE-
exporting first time 1 statements, the exporter would not be entitled to
avail EFS facility.

Document: Demand Promissory Note

Checklist Explanation
1. Exporter Letterhead DP Note should be on the exporter’s letterhead
with correct and complete exporter’s address
and contact number.
2.Text of DP Note Text of DP Note must be in accordance with the
specimen provided by SBP.

3.Date on DP Note Date of DP Note should be the same as date of

finance mentioned on Form-D.

4.Place of DP Note The place of issue of the DP note is to be

mentioned, and should be the same as that on
the Undertaking Form.
5.Amount of Finance Correct amount of loan has to be stated in
figures as well as words. It should not exceed
the available limit of the exporter.
6.Name, Seal & Signatures of The DP Note has to be authenticated by the
Direct Exporter exporting company. Complete name, designation,
seal and signatures of the person authenticating it
on behalf of the exporting company must be
given.
7.Revenue Stamps In order to make it a legal document, revenue
stamps must be affixed on DP Note and should be
cancelled by an authorized signatory of the
exporter.
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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Document: Demand Promissory Note

Checklist Explanation
8.Name, Seal & Signatures of Counter signatures of two authorized signatories
Authorized Dealer of the authorized dealer (AD) should be present.

9.Endorsement In case refinance is claimed by the main branch

of authorized dealer, only one endorsement by
the main branch itself, in favor of relevant SBP
BSC Office is required.
However, if refinance is claimed by sub-branch
of authorized dealer, it must endorse the DP Note
in favor of its main branch. The main branch
should then endorse it in favor of relevant SBP
BSC Office.
10. Seal “Verified & Accepted If case is in order, DP note must be officially
by D.C.M” & Signatures of verified and accepted by Deputy Chief Manager
D.C.M of Development Finance Division of the relevant
SBP BSC office, with seal and signature to make
it a legal promise accepted by the exporter,
authorized dealer and relevant SBP BSC Office.

Document: Export Overdue Certificate

Checklist Explanation
1. Total Overdue Export Proceeds Total amount due must not be greater than 5% of
as percentage of Total Exports total export proceeds. If it exceeds 5% of total
amount, grant is not admissible as per
instructions.
2. Date of Overdue Certificate Consolidated position as on 31st March or 30th
September has to be shown so that the true
position of export proceeds due and realized
during the period is reflected.

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

2. Inputting & Authorization of Refinance

Once the application for refinance has been scrutinized and no objections are found, the loan
can be granted. For this purpose, the information has to be fed in GLOBUS.

Following steps are followed to input a grant application in GLOBUS:

i) Open GLOBUS Banking and go to Export Refinance Menu

ii) Go to Export Refinance Transaction Menu

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

iii) Go to Export Refinance Part-I

iv) Ensure that the ‘input’ mode is turned on and then press F3 for next record

v) Enter the bank’s name, relevant branch’s name, the exporter code (after eight zeros),
‘180D’ in maturity date, amount of finance and the date of finance

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

vi) Go to ‘Exporter Details’ tab and enter: HS Code, place, amount and date of DP note

vii) Press F5 to commit, define repayment schedule and press F5 again

Once a grant has been inputted in GLOBUS, it is authorized by the relevant officer having
authorization rights in ‘authorize’ mode.

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

3. Additional Required Document: Debit Authority

Debit authority refers to a written document duly signed by authorized persons of the
authorized dealer, authorizing SBP-BSC Office to debit their account against a particular loan
number (LD) of the exporter.

In EFS Part-I the loan maturity period is 180 days. After the exporter has repaid the loan to the
authorized dealer (AD), it the becomes the responsibility of the AD to repay the same to
relevant SBP BSC office within three working day, otherwise a retention fine is charged @ 42
paisa/1000/per day.

Following are the types of Repayments made through Debit Authority:

 Partial: Exporter/AD repays the loan partially before due date.

 Early: Exporter/AD repays the loan before due date with interest amount in case of
conventional loan. In case of Islamic, the AD can pay the profit on the due date or after it
(depending on the availability of profit rate).

 Due Date: Exporter/AD repays the loan on due date with interest amount in case of
conventional loan. In case of Islamic, the AD can pay the profit on the due date or after it
(depending on the availability of profit rate).

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

III. Submission of Documents

1. Submission of Shipping Documents

The process of submission of shipping documents is involved in the case of pre-shipment

cases. Following documents are to be provided by the exporter to the bank from where the loan
has been availed and the concerned bank will forward the same to respective SBP BSC office.

1.1 Annexure-D

After grant of loan, direct exporter is under obligation to make shipment within 180 days and
submit proof of the same within 30 days from date of shipment or expiry of loan; whichever is
later, to respective bank from where loan has been availed. After examination of shipping
documents, bank will submit “Annexure-D” that would include all the details regarding date of
shipment, contract number, exporter name etc within 7 days to respective SBP BSC office. So
in total 217 days Annexure-D must be provided to SBP BSC office.

Annexure-D has 26 columns containing different type of information regarding direct and/or
indirect exporter. Following information must be check in Annexure-D:

Document: Annexure-D
Checklist Explanation
1. Name of Bank Name of the bank in Form-D and Annexure-D must
be same because proof of shipment should be
submitted through the bank from where loan is
granted to the exporter.
2. Address of the concerned Address of branch mentioned in Form-D should
branch match that in Annexure-D so that it can be clarified
that same branch has submitted the documents of
shipment from where the exporter has availed the
loan.
3. Date Date on which the Annexure-D was prepared by the
bank should be mentioned.
4. Demand Loan Number LD No. mentioned on Annexure-D should match
(LD No.) the number allocated at the time of grant by the
respective SBP BSC office, to ensure that shipping
documents are submitted against the same loan.
5. Date of Grant Date of grant on Annexure-D must the same on
which refinance was provided to the bank, to avoid
any discrepancy.

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Document: Annexure-D
Checklist Explanation
6. Amount Loan amount must be same in Form-D and
Annexure-D to avoid any discrepancy.
7. Date of receipt of shipping Date of receipt of shipping documents from
documents from exporter exporter must be within 30 days from the expiry of
loan or actual date of shipment; whichever is later.
If date of receipt is not as per these timelines, fine
on account of ‘late submission of shipping
documents’ is to be charged at the rate of Rs.
2,000/- for default and Rs. 100/- per day for every
next day the submission has been delayed.
8. Seal & Signatures of Direct Annexure-D has to be authenticated by the
Exporter exporter/exporting company. Complete name,
designation, seal and signatures of the
exporter/person authenticating it on behalf of the
exporting company must be given.
9. Name, Seal & Signatures of Signature of authorized personnel of the refinance
Authorized Dealer availing branch of the concerned bank and its main
branch, should be present on Annexure-D.

1.2 Exchange Rate Sheet

In case when currency in which contract was constituted differs from the currency of invoice
amount (provided in Annexure-D) or the invoice amount is stated in two different currencies,
an exchange rate sheet is mandatory to be submitted along with shipping documents. The
exchange rate should be same as on the date of finance which is provided in Form-D.

1.3 Utilization Certificate

Along with the shipping documents, the exporter has to submit a utilization certificate in case
loan is availed in parts against a single contact/L/C amount. For each loan SBP BSC allocates a
separate Demand Loan number (LD number), the purpose of the utilization certificate is to
provide the details in case the exporter wishes to split the invoice amount of an E-Form against
separate LDs/loans.

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Following information is given in the utilization certificate that must be checked:

Document: Utilization Certificate

Checklist Explanation
1. E-Form Number All E-Forms that are used to make shipment
against the contract are listed.

2.Demand Loan Number LD number against which the mentioned E-

(LD Number) Forms is used.

3.Total Invoice Amount Total invoice value against which E-Form was
issued.

4.Amount of Invoice Utilized Portion of total amount utilized in the LD issued

against the loan for which shipping documents
are received.
It may be equal to total amount in case of full
utilization or lower in case of partial utilization.

5.Balance In case of partial utilization the remaining

invoice value which is utilized or to be utilized
against other loans. Also the LD numbers are to
be specified in which remaining amount is/will
be utilized.

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

2. Submission of Export Proceeds Realization Certificate (EPRC)

Realization of export proceeds against the loan that has been availed under EFS is a necessary
condition. Under Part-I of the scheme the exporter is given a time period of 210 days (300 days
in case of carpet exporters) from the date of shipment for repatriation of proceeds. EPRC is a
proof of export proceeds realized and submission to concerned SBP BSC office within three
working days from date of realization as per swift message.

The format of EPRC varies from bank to bank, however the below mentioned 12 details are
common to all and must be checked:

Document: Export Proceeds Realization Certificate

Checklist Explanation
1. Name of Exporter The name of the exporter against whose exports
realization of proceeds is being reported must be
stated on the EPRC.
2. Bill Number and Date Bill number must be provided by the bank and is
used by concerned SBP BSC office to extract
information regarding the status of the bill, i.e.
whether it on the basis of collection or has been
negotiated.
In case of collection, realized amount has to be
reported to concerned SBP BSC office within three
working days from date of realization. While in the
case of negotiation the exporter has to pay realized
amount within three working days from date of
negotiation.
3. Invoice Number, Date and Invoice is issued by the exporter to the importer;
Value containing details about price, quantity,
specification of goods exported, date on which
invoice was issued and the value of the invoice.
The value of invoice mentioned in EPRC must be
matched with Annexure-D to ensure that EPRC of
the same E-Form is received).

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Document: Export Proceeds Realization Certificate

Checklist Explanation
4. E-Form Number and Date The details against an E-Form generated and issued
by the authorized dealer (AD) to the exporter must
be mentioned. These include the E-Form number
and its issue date.
The number along with the prefix of the E-form
must match in both EPRC and Annexure-D to
ensure that proceeds are being realized against the
shipment reported in Annexure-D.
5. Date of Shipment The date of shipment is taken as the date of
flight/shipped on board and must with the date
given in Annexure-D.
6. Terms of Shipment Terms of shipment depends upon terms and
conditions of agreement between importer and
exporter. LC/DP/Consignment/Payment This is
essential for estimation when foreign proceeds will
be realized and on what terms and conditions.
7. Shipping Bill Number and Shipping bill number is issued by the shipping
Date company through which goods are exported and can
be used to track shipment. Both the number and
date of the bill must be specified in EPRC.
8. Bill Amount Bill amount mentioned in EPRC must be matched
in with Annexure-D and it is important to also
ensure that sign of currency is the same in both
documents. if currency sign differs from Annex-D
then we may advise AD to provide copy of invoice.
9. Detail of Deduction Different types of charges are deducted from bill
amount some are in foreign currency and remaining
are in PKR. These include F.C charges, agent
commission, bank service charges, WTH tax and
EDS charges. It must be ensured that sum of these
charges and realized amount must equal to bill
amount. Also SBP BSC office will only allow the
deduction of EDS charges and WHT tax for the
purpose of realization of proceeds to it.

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Document: Export Proceeds Realization Certificate

Checklist Explanation
10. Net Amount Realized Amount in foreign currency after deduction of all
allowed charges is the amount realized. Exchange
rate prevailing at the time of realization would be
considered. Amount in PKR is product of net
amount realized and exchange rate.
11. Date of realization Date at which foreign proceeds realized in the
country. This date is essential to ensure repayment
is made within 3 working days of date of
realization.
12. Reference of schedule A-1/O- A-1/O-1 must be written in case of full payment
1 and A-2/O-2 and the office while A-2/O-2 must be written in case of advance or
of State Bank to whom partial payment. This is record maintained in
transaction reported. FEOD, SBP with respect to foreign exchange return
submission. Also the month in which schedule is
submitted must be matched with month in date of
realization of foreign proceeds.
13. For shipments made against Advance payment is not allowed under EFS part-I.
Advance Payment It must be ensure that if partial advance payment is
received, loan is granted against the remaining
contract amount only. Subsequently, SBP BSC will
be concerned with the realization of the amount
equivalent to its loan amount.

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

IV. Fines and Refund

1. Fines under EFS Part-I

In case of irregularities or non-compliance with the prescribed instructions of SBP on the Export
Finance Scheme, various penalties are imposed on both the borrower and bank. Details and rates
of these are discussed under:

Nature of Irregularity Rate of Fine Charged To

1. Late/less adjustment of Paisa 42 per day per Rs.1,000/- or part Bank
funds by a bank thereof
against repayment
made to it by exporter

In case the exporter fails to make Exporter

2. Non –Shipment shipment against loan availed under EFS
Part-I, fine at the rate of paisa 37 per day
per Rs.1,000/- or part thereof will be
charged.
If Annexure-D is not received in 217
days from the date of grant, it is
considered as non-shipment by the
exporter and fine is charged. However, if
in the due course Annexure-D is
submitted non-shipment fine will be
refunded and relevant fine will be
charged.
If the exporter fails to make shipment Exporter
3. Short Shipment equivalent to the amount of loan availed,
it will be considered as short shipment
and a fine of paisa 28 per day per
Rs.1,000/- or part thereof will be
charged.
4. Delayed Shipment In case the shipment has been made after Exporter
the prescribed time period, i.e. with 180
days from the date of finance, the case
will be of delayed shipment and fine of
paisa 28 per day per Rs.1,000/- or part
thereof will be charged.
5. Fine for delayed If shipping documents are not received Exporter/Bank
submission of shipping within 30 days from the date of shipment
documents by the from the exporter to the concerned bank,
fine of Rs.2,000/- for the default and
exporters
Rs.100/- per day for every next day till
submission will be charged.

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Nature of Irregularity Rate of Fine Charged To

6. Fine for non‐ Rs.20,000/‐ will be charged if EPRC is Bank
submission of EPRC not received within 210 days from the
date of shipment. 25% of which i.e.
Rs.5,000/‐ would be non refundable even
if it is subsequently submitted.
7. Fine for wrong Rs. 100/‐ per wrong/ incorrect Exporter/Bank
information and reported entry, but not exceeding
incorrect reporting / Rs.1,000/- in a particular statement.
entry in any Statement
required to be
furnished to State
Bank of Pakistan

8. Incorrectly reporting A flat fine of Rs. 200,000/- will be Bank

corporate exporter as charged.
SME in Form-D (Circular letter no. IH&SMEFD/ EFS/
936(Policy) /X/ 2015-18306)
9. Fine for irregular In all pre-shipment/post-shipment loans Bank
availment of pre- cases where it has been noticed that
shipment/post- shipment(s) was made before/after (in
case of post-shipment) disbursement of
shipment export
finance, the shipment has to be treated as
finance facility by in order subject to recovery of fine at the
exporters rate of Rs.2,000/- and Rs.100/- per day
for the period for which the refinance
loan remains outstanding on the part of
the bank or up to the date of factual
position conveyed to concerned SBP
BSC Office, whichever is earlier.

Note: All relevant fines are charged by the SBP BSC office to the concerned bank, which can
recover the fine amounts from the exporters if imposition of such fines is on account of their
failure to comply with the instructions.

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

2. Refund of Fine

Some of the fines mentioned in the previous section are refundable while others are not, details
are provided in the table below. All refunds are subject to approval from the Chief Manager of
the concerned SBP BSC office.

Refundable/ Not Refundable/

Nature of Irregularity
Partially Refundable
1. Late/less adjustment of Not Refundable
Repayment

2. Non-Shipment Refundable

3. Short Shipment Refundable

4. Delayed Shipment Not Refundable

5. Late Submission of Shipping Not Refundable

Documents

6. Non-Submission of EPRC Partially Refundable

7. Misreporting Not Refundable

(Annexure-D & EPRC)

8. Incorrectly reporting Not Refundable

corporate exporter as SME in
Form-D

9. Fine for irregular availment Not Refundable

of pre-shipment/post-
shipment export finance
facility by exporters

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

EFS PART- I - WORKFLOW CHARTS

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Grant of Loan

Allocation of Overall Annual Refinance Limit to Commercial Banks by IH & SMEFD

SBP

Allocation of Office wise Limit by IH & SMEFD on Bank’s request

Input / Authorization of Annual Limit by respective SBP BSC Office

Submission of Grant Loan Application by Authorized Dealer

Scrutiny of Application

Cross check and forwarding to DCM by ACM

Approval of Disbursement by Divisional Head/ DCM

If Grant Application is without irregularities, it is inputted and authorized in Globus and

refinance is granted to authorized dealer, also advice is issued. Otherwise, the application
is returned back to the bank/AD

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Submission of Shipping Documents

Submission of Annexure D After 217 days of Shipment

Scrutiny of Annexure D for charging of any relevaent fine

(if applicable)

If no fine is involved, the case will be signed by ACM for waiting for EPRC.
However, in case of fine, the case will be forwarded to Internal Monitoring Unit
(IMU) with recommendation of fine

IMU will cross check the case and forward the case to Divisional Head/DCM with
its observations (if any)

Divisional Head/ DCM will accord approval for charging of fine

Input/ authorization of fine in the system & issuance of advice

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Submission of Export Proceeds Realization Certificate

Submission of proof of realization (EPRC) after 210 days from date of shipment

Copy of EPRC is submitted by exporter through AD to concerned SBP BSC office

Scrutiny of EPRC and cross checking by ACM

In case no fine is involved, it is forwarded to IMU with recommendation of closing

the case. However, in case fine is involved, it is forwarded to IMU with fine
recommendations before closing of case

Final closing orders are obtained from IMU

Divisional Head/DCM approvals charging of fine and the case is closed

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DEVELOPMENT FINANCE SUPPORT DEPARTMENT, SBP BSC (BANK) EXPORT REFINANCE OPERATIONS MANUAL – PART-I

Refund of Fine

Exporter lodges request of fine with submission of required documents through

bank/AD

Case is processed by officer and forwarded to ACM alongwith refund sheet

ACM crosschecks the case and forwards to DCM

DCM approves the case and forwards it to IMU

After checking whether refund is applicable or not, IMU approves the case and
forwards it to CM for final approval

CM accords his approval for refund.

Refund is inputted and authorized in the system and voucher is signed by ACM and
DCM and furnished to concerned Banking Division of SBP BSC office

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