01-03-2010, 11:57 PM
In Export refinance scheme, SBP provides financing facility to commercial banks so that they can enhance export financing for their customers.
I have read in a bank's annual report
"As per agreements, the Bank has granted the SBP the right to recover the outstanding amount from the Bank at the date of maturity of the
finance by directly debiting the current account maintained by the Bank with the SBP. "
Does it mean that
SBP gives exclusive financing to banks for export-finance purpose and that it refinances banks if they are short of funds for this purpose?
Plus, i have read in newspapers that export finance rate increased so due to this export REfinance rate also increases?
So what is is the right mechanism? Logically Export finance rates should follow export refinance rates. But according to the above line of newspaper, export REfinance rates are following export finance rates>
What is the right mechanism?
I have read in a bank's annual report
"As per agreements, the Bank has granted the SBP the right to recover the outstanding amount from the Bank at the date of maturity of the
finance by directly debiting the current account maintained by the Bank with the SBP. "
Does it mean that
SBP gives exclusive financing to banks for export-finance purpose and that it refinances banks if they are short of funds for this purpose?
Plus, i have read in newspapers that export finance rate increased so due to this export REfinance rate also increases?
So what is is the right mechanism? Logically Export finance rates should follow export refinance rates. But according to the above line of newspaper, export REfinance rates are following export finance rates>
What is the right mechanism?
