FAISALABAD - State Bank of Pakistan has allocated Rs 228 billion under Export Refinance Scheme to provide cheap finance to export sector and it would adequately enhance this facility to match the growing needs of exporters. This was stated here by Muhammad Kamran Shehzad, Deputy Governor State Bank of Pakistan, while addressing the members of Pakistan Textile Exporters Association. Kamran said that State Bank of Pakistan is continuously monitoring the availability of credit under this key source of financing to the export sector to ensure that exporters do not suffer on account of lack of funds. SBP is playing dynamic role to ensure the economic growth of the country despite of local and international crisis, he said. SBP is fully aware of the financial crunch being confronted by the exporters, he added. He underlined the role of textile sector in overall national economy and assured that problems faced by this sector would be resolved on priority basis. Referring to PTEAs concern about higher service charges, he said that most of the banks are privatized and SBP has repeatedly asked them to reduce their service charges in view of the prevailing and protracted crisis. Banks are independent to fix their service charges, however, they are morally bound to protect the interest of their clients, he said. He hoped, Soon Bank service charges would come up to the expectations of the business community. Regarding dishonouring of commitments by foreign banks and stuck up amounts of PTEA members of $4.469m in Russian banks, he said that SBP had already managed the repatriation of such stuck up amounts and has already taken up this matter with Central Bank of Russia. However exporters should also utilize diplomatic channels for release of such amounts. Real lending rates were much lower as compared to other countries in the region, he claimed. According to latest available information, the real lending rate in Pakistan is only 0.4% while in Indonesia it is 9.5%, in Sri Lanka and Bangladesh its 7.6% in Malaysia 4.2% and in India its 0.8%, he added. Referring to PTEA concern over bank spread, Kamran said that SBP has been advising banks to reduce their spread in order to offload the business community of the country. However the exporters should also select the bank of their own choice having lower spread on loans, he added. Answering a question, he said that a new policy would be discussed for the upgradation and survival of big labour intensive and unorganised weaving sector. Earlier, PTEA Chairman Khurram Mukhtar welcomed the guest and said that State Bank of Pakistan has played vital role being the regulatory authority and took necessary measures to safeguard our banking system in Pakistan. Due to timely and effective policies, our banking system remained safe during the severe financial crisis where the banking system of biggest economies suffered, he said. He expressed heartiest gratitude and tribute to the management of the state bank of Pakistan for bringing suitable reforms in our banking system which also flourished the Industry. He also appreciated the role of State bank of Pakistan Faisalabad office. The PTEA chairman briefly apprised the Deputy Governor SBP with the main problems being faced by textile exporters. He requested the SBP to increase the ERF eligibility of the exporters from 50% of last year performance to at least 67%. He also mentioned that total ERF earmarked for the textile industry is Rs 110b against the total textile sector borrowings of Rs528b, which may be increased substantially to meet the working capital requirements of the Industry. Apprising him with latest situation, Khurram Mukhtar said that at present almost all the major banks have discontinued their support for the textile industry and reportedly capped their exposures towards Textile Units. In the present scenario, the survival of this industry is mainly dependent upon the relaxed credit policies and availability of cheaper finance from the banks, he added. The high costs of borrowings due to increased Kibor and extra ordinary spread being charged by the banks is making this industry non competitive in the global market, he claimed. He said, We need to reduce our interest rates according to the key players in the region. He also requested the SBP to bring down the bank mark up rate to single digit. He also appreciated the role of State bank of Pakistan Faisalabad office.