order to develop the agricultural produce marketing
and enhance storage capacity SBP has decided to float
a Scheme for “Financing Facility for Storage of
Agricultural Produce (FFSAP)” to encourage Private
Sector to establish Silos, Warehouses and Cold Storages.
The salient features of the FFSAP Scheme are as under:
1. Scope of the Scheme:
The financing shall be available on long term basis
for establishment, expansion and balancing, modernization
& replacement (BMR) of Steel/Metal/Concrete Silos,
Warehouses & Cold Storage facilities for storing
Financing facilities shall be available for:-
(a) Purchase of new imported & locally manufactured
plant & machinery, equipments and accessories
thereof, to be used in Steel/Metal/Concrete Silos,
Warehouses and Cold Storages. Detail of machinery
given in Annexure –I.
Purchase of new generators. The capacity of generator
shall, however, not be in excess of in-house energy
requirements of the Silos/Warehouses / Cold Storages.
Upto 65% cost of entire civil works.
2. Tenor and size of Loans:
i) Financing shall be available for a maximum period
of seven years including a maximum grace period of
ii) In case financing is provided on staggered basis,
maximum period of financing shall start from the date
of disbursement of 1st installment.
iii) Maximum financing of banks / DFIs to a single
project shall not exceed Rs 500 million under the
Scheme. However, banks/DFIs may provide financing
facilities over and above the said maximum limit from
their own sources, keeping in view their internal
iv) In case of financing requirements exceeding Rs
200 million, banks/DFIs are encouraged to provide
finance under consortium arrangements.
v) Entire financing shall be subject to the adherence
of all rules & regulations issued by SBP from
time to time.
3. Rates of Service Charges:
i) The rate of service charges at which SBP will provide
refinance to the banks shall be determined on the
basis of average of weighted average yields of last
two auctions of 3, 5 and 7 years PIBs, subject to
(a) The service charges shall be adjusted on six
(b) The rates once fixed shall remain locked-in
for the entire duration of the loan, provided the
borrowers continue to repay on due dates as per
repayment schedule. In case new rates are lower,
then benefit will be passed on to the borrowers.
(c) Where financing to a project is provided on
staggered basis, each installment shall attract
the rate of finance / refinance applicable on the
date of disbursement of installment by the bank.
ii) For the financial year 2009-10 following service
charges and rates for end users have been fixed which
are lower than as worked out under criteria mentioned
3 years and up-to 5 years
5 years and up-to 7 years
4. Participating Financial Institutions (PFIS):
All commercial banks and Development Finance Institutions
(DFIs) shall be eligible for providing financing under
5. Bank/DFI-wise Refinance Limits
i) Yearly limits shall be allocated to individual
banks/DFIs under the Scheme.
ii) The limits shall be allocated for each fiscal
year from 1st July to 30th June, which will be reviewed
on quarterly basis.
iii) Applications for sanction of limits for each
fiscal year (July-June basis) shall be sent by the
interested banks/DFIs to the Director, SME Finance
Department, latest by 15th May each year to facilitate
sanction of annual limits at the earliest. For the
current year the request for sanction of limits may
be submitted within 15 days from the date of issuance
of this circular.
6. Grant of Refinance:
i) The State Bank shall provide refinance to each
bank/DFI on service charge basis in terms of Section
17 (2) (d) read with section 22 of State Bank of Pakistan
ii) Refinance shall be allowed to the Banks/DFIs by
the concerned office(s) of SBP BSC (Bank) on submission
of documents as may be required by State Bank. The
documents initially required are attached herewith.
7. Repayment of the loans:
i) Principal amount of loans shall be repayable in
equal quarterly / half yearly installments after prescribed
grace period, if any. However, if a borrower will
repay the loan amount or its installment, in part
or in full, before the due date(s), the banks/DFIs
shall be under obligation to repay the amount(s) so
received within three working days to the concerned
office of SBP-BSC (Bank) failing which fine for late
adjustment of loan will be recovered from the concerned
bank/DFI, at the rate specified by the State Bank.
ii) The refinance granted by SBP-BSC offices to the
Banks/DFIs shall be recovered on the due dates as
reported in the original repayment schedule from the
account of the banks/DFIs maintained with the respective
office of the SBP BSC (Bank). In case the borrower(s)
fails to make repayment of the amount of installment
as per the original repayment schedule, the bank/DFI
shall be entitled to charge normal rate of mark up
on such overdue principal amount besides taking other
actions to recover the same as are incidental to such
defaults. In no case the liability of banks/DFIs to
pay/repay to SBP BSC the principal amount of refinance,
or mark up or any other charges or penalty thereon
shall be dependent upon the recovery from the borrower
nor shall such liability be affected by any default
on the part of the borrower.
iii) Mark-up shall be paid on quarterly basis.
Other Terms & Conditions:-
Banks/DFIs shall provide financing facilities to the
prospective borrowers as per their lending policies
duly approved by their Board of Directors. Further
financing shall be subject to compliance with all
rules and regulations including Prudential Regulations
as prescribed by the State Bank from time to time.
ii) Banks / DFIs shall ensure that loan proceeds are
used exclusively for the purpose it is approved. They
shall also ensure that borrowers has fulfilled pre-disbursement
formalities, through due diligence as per their own
internal arrangements to avoid malpractices and mis-utilization
of funds under the Scheme.
iii) The banks /DFIs shall ensure the correctness
/ evaluation of feasibility & cost estimates either
through expertise available in-house or through an
outside reputable consultant (either an individual
or firm) & place it on record.
iv) Disbursements by banks/DFIs should not be made
to the borrower directly; instead payments shall be
made to the manufacturers / suppliers of plant &
v) In case of financing for civil works the bank/DFI
concerned shall monitor as per its own mechanism that
the funds are utilized strictly for the construction
purpose as per approved plan. Banks/DFIs may open
an escrow account where borrower’s share is
deposited for making matching disbursements for civil
vi) Financing shall be available only against LCs
in case of financing against imported plant &
machinery / raw material to be used for construction
of the Silos/Cold Storage.
vii) Banks/DFIs shall not take more than six weeks
in evaluating an application for financing under the
Scheme from the date of receipt of complete information
from the borrower. Where the request is declined,
the bank/DFI will explicitly apprise the prospective
borrowers in writing, the reasons for rejecting the
viii) Financing shall be available to the extent of
C&F Value/ex-factory/ showroom price of the new
imported or locally manufactured plant, machinery,
equipments and accessories thereof.
ix) Advance payment to the extent of 20% of the C&F
value/ex-factory/ showroom price of imported or locally
manufactured machinery can be made in terms of related
underlying agreement by securing the bank’s
interest. In case of imported machinery, advance payment
will be subject to compliance with the terms &
conditions prescribed in FE Manual and instructions
issued from time to time by SBP’s Exchange Policy
Department in this regard.
x) Refinance shall be provided on the basis of certification
by the Internal Audit of financing bank/DFI with regard
to confirmation that the loan is within the terms
and conditions laid down in the Scheme. A copy of
the said Internal Audit Certificate shall also be
submitted to the concerned office of SBP BSC (Bank)
at the time of availing the refinance facility.
xi) Loan / financing under the Scheme shall be checked/verified
by SBP’s Banking Inspection Department (BID)
during inspection of the banks/DFIs to ensure that
the same have been allowed as per the terms and conditions
of the Scheme.
xii) Financing shall not be available for the purpose
of acquisition of land.
xiii) Second-hand plant, machinery and equipment shall
not be eligible under the scheme.
xiv) All LCs (sight as also usance) established since
January 01, 2008 shall be eligible for financing.
xv) Where a bank/DFI considers the requests of their
borrowers for rescheduling of loans granted under
the Scheme, the principal amount of refinance shall
only be rescheduled in a way that total tenor of refinancing
under the Scheme does not exceed maximum period of
7 years from the date of 1st disbursement made by
the banks. Further, the borrower shall be liable to
make payment of mark-up at the rate applicable on
the date of such rescheduling, or the original rate
whichever is higher.
In case of violation of the terms & conditions
of the Scheme, the SBP shall reserve the right to
recover the entire amount of refinance granted to
the bank/DFI along-with fine at the rate of Paisa
60 per day per Rs 1000/- or part thereof.
ii) In case, a borrower will make early repayment(s)
of the amount of loan/installment(s) and bank/DFI
fails to repay the same to concerned office of SBP-BSC
within three working as mentioned in clause 7(i) above,
late adjustment fine will be charged from the concerned
bank/DFI at the rate of Paisa 60 per day per Rs 1,000
or part thereof.
iii) It may be noted that fine shall be recovered
through the bank/DFI who availed refinance under the
Scheme. Therefore, it will be the responsibility of
the bank/DFI to secure its interest in this regard,
however, in no case fine imposed on bank/DFI due to
its negligence shall be passed on to the borrower.
In case, they pass on the fine so recovered from them
to the borrower, the bank/DFI shall be under obligation
to justify the same to ensure that the fine is not
passed on to the borrower merely on the strength of
the action of SBP.
The Scheme shall be effective from the date of issuance
of this Circular and shall remain valid up-to December
31, 2012. A further period of six months shall be given
for full disbursement of entire loan for all loans sanctioned,
under the Scheme, and conveyed to the borrower before
December 31, 2012.