In a significant decision aimed at streamlining export-related financing, the Economic Coordination Committee (ECC) of the Cabinet has approved the gradual phasing out of the State Bank of Pakistan’s (SBP) Rs330 billion Long-Term Financing Facility (LTFF) to Exim Bank. This decision, made during a meeting held on Friday under the chairmanship of Finance Minister Muhammad Aurangzeb, marks a strategic shift in Pakistan’s financial landscape, particularly concerning the allocation of funds for export financing.
According to a statement released by the Finance Division, the ECC approved the phased transfer of the SBP’s LTFF portfolio to Exim Bank, signaling a move to transition the responsibility of managing long-term export financing from the central bank to the specialized export financing institution. In the decision, an allocation of Rs1.001 billion has been set aside through a Technical Supplementary Grant (TSG) to meet the subsidy requirements for the new LTFF portfolio, which is intended to support the upcoming fiscal year 2025.
The LTFF has long served as a crucial financial support mechanism for Pakistan’s export sector, providing long-term loans at subsidized rates to businesses involved in the production and export of goods. By moving the portfolio from the SBP to Exim Bank, the government aims to enhance the focus and efficiency of export financing while consolidating the role of Exim Bank in fostering Pakistan’s export growth. The shift is expected to contribute to the stabilization of the country’s export financing framework and provide more targeted support to exporters.
During the same meeting, the ECC reviewed and approved several other key financial proposals. One of the most notable decisions was the approval of a Technical Supplementary Grant (TSG) amounting to Rs2 billion for the Ministry of Information and Broadcasting. This allocation, sourced from the ministry’s existing budget of Rs5.6 billion, will be used to settle outstanding advertisement dues owed to media houses. The move is expected to address liabilities in the media sector and ease financial pressures on media houses.
Additionally, the committee approved a TSG of Rs430 million for the Ministry of Defence to support the execution of SAP (Special Assistance Program) schemes in Punjab. The schemes aim to address critical needs in the region and are part of the ongoing efforts to provide financial assistance to key sectors.
The ECC also approved the allocation of Rs250 million in government-paid-up capital for the Jinnah Medical Complex & Research Centre (JMC&RC) Company. This funding will aid the establishment of a state-of-the-art, 1,000-bed academic medical center in Islamabad, a project designed to improve healthcare facilities and medical research in the country. However, the committee has asked the JMC&RC Company to submit a detailed breakdown of expenditures and activities before requesting further funding allocations.
In addition to these approvals, the committee ratified a TSG of Rs24.556 million (approximately $87,671 at the current exchange rate) to Mrs. Lia Bomba of JAED Textile Pvt Ltd, based in Sydney, Australia. This grant is being provided in compliance with the Supreme Court of Pakistan’s directives issued on March 19, 2025.
The meeting was attended by a range of key government figures, including the Minister for Power, Sardar Awais Ahmed Khan Leghari, the Minister for Petroleum, Ali Parvez Malik, and the Federal Minister for Board of Investment, Qaiser Ahmed Sheikh. Senior officials from relevant ministries and divisions, as well as the Chairman of SECP, were also present to discuss and approve these vital financial matters.
In conclusion, the decision to phase out SBP’s LTFF to Exim Bank represents a crucial step in Pakistan’s evolving financial strategy, aimed at improving export financing while aligning more specialized financial services with the country’s broader economic goals. With the added approvals for media and defense sector support, as well as healthcare investments, the ECC’s recent decisions are expected to have far-reaching effects on Pakistan’s financial and economic sectors.