The State Bank of Pakistan has decided to refund fines totalling Rs2.354 million imposed on commercial banks for availing refinancing facilities under the defunct scheme of Long Term Financing for Export-Oriented Projects (LTF-EOP) without valid limits in the first quarter (July-September) of the current fiscal year (2007-08).

According to the SBP Notification, the Central bank also asked the banks to refund these fines to the respective exporters. No limits were sanctioned under LTF-EOP for 2007-08 for the import of plant and machinery and the scheme was withdrawn in October last year. Subsequently, banks development finance institutions (DFIs) were allowed to avail refinance facility against letters of credit (LCs) opened by banks during 2006-07 and retired or to be retired after June 30, 2007. The State Bank has now decided to refund the fines recovered from banks. The State Bank has also asked the banks to ensure that the fines refunded to them by SBP should be passed on to the respective exporters.