The State Bank of Pakistan has received Rs. 5 billion from the government under the textile package but there are no instructions for utilization of the amount despite several demands by the textile industry.

Budgetary allocation was required for several schemes announced in the Trade Policy including duty drawback for the textile sector, subsidy to PTA users and Export Finance Scheme (EFS) related incentives and also for the disbursement of remaining 60% amount of R&D claims.

According to a letter of the State Bank addressed to the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), the Ministry of Textile is yet to provide the exact heads where this amount would be utilized. SBP cannot start utilization of the released funds unless Mintex clarifies under which schemes the funds are to be utilized and in what proportion.

Bilal Mulla, Chairman FPCCI Standing Committee on Value Added Textile Products and former Chairman PRGMEA said that due to absence of coordination between Mintex, SBP and Ministry of Finance, the allocated fund was lying unutilised with the SBP. He said textile industry has been facing financial crunch and is still waiting for the R&D claims. There are 60% dues of R&D yet to be paid. The package of Rs40 billion for exports has already been approved in the budget 2009-10 and there should not be any delay in issuance of instructions to the SBP, which is responsible for the disbursement of claims under the said notification.

A spokesman of the Textile Ministry has clarified that with constant efforts of the Minister for Textiles Industry, the Secretary Mintex and co-operation of the Minister for Finance who has ordered the release of the budgeted amount of Rs 10 billion, of which Rs 5 billion has already been placed at the disposal of the State Bank of Pakistan to commence disbursements. The remaining amount would be released to the SBP after the utilization of the first trenches.