Business Banking

Bank of Khyber, offering Shariah-compliant facilities for the exporters whether they are SMEs, Commercial & Corporate entities to support their working capital needs, facilitate international trade transactions, and enhance their global market competitiveness in accordance with Shariah principles.

• Islamic Export Refinance Scheme (IERS) / Export Finance Subsidy Scheme (EEFS) for Pre Shipment – Part I & Post Shipment – Part II:

  • To meet short term working capital requirement for export purpose.

  • The facilities shall be available under Pre Shipment (Part I) to the extent of 100% of the value of a Firm Export Order/ Export Letter of Credit (FEO/ELC) in case of Direct Exporter (DE).

  • The facility shall also be available under Pre Shipment (Part I) to Indirect Exporter (IE) for pre shipment basis to the extent of 100% of value of Inland letter of Credit (ILC)/Standardized Purchase Order (SPO).

  • The Direct Exporter (DE) under Post Shipment (Part II) shall be entitled to avail finance limit equivalent to 50% of his export performance during the preceding year (July–June Basis) on the basis of particulars of export proceeds realized against export of eligible commodities under the Scheme as reported on a statement on form EE‑1.

  • Eligibility Criteria as per SBP Islamic Export Refinance Scheme.

  • Maximum Period of 180 days for Direct Export against eligible commodities.

  • Maximum Period of 120 days for Indirect Export against eligible commodities.

  • Maximum Financing rate for End User is SBP Policy rate minus 3%.

  • The prevailing Profit Rates and Guidelines issued by SBP will be applicable and that may vary from time to time, as and when revised by SBP.

  • SBP Scheme link details: https://www.sbp.org.pk/incen/iers/Scheme.pdf

• Islamic Long Term Financing Facility (ILTFF) for Plant and Machinery

  • To meet the long term requirement for export oriented projects.

  • The BOK shall provide long term local currency Shariah Compliant financing for imported and locally manufactured new plant and machinery to be utilized by eligible exporters.

  • The financing request of the customer may be considered for new projects or expansion/ BMR (balancing, modernization and replacement) of existing projects subject to meet the prescribed criteria.

  • Eligibility Criteria as per SBP Islamic Long Term Financing Facility.

  • The facility shall be available to the export oriented projects only if their annual export is at least equivalent to USD 5,000,000 (USD five million only) or if at least fifty percent (50%) of their sales constitute exports, whichever is lower.

  • Financing under the Scheme shall be available to the extent of the C&F value of the imported new plant and machinery and/or Ex‑factory/showroom price of the new locally manufactured machinery to be purchased by eligible customers.

  • Financing is available for new projects based on projected exports. New projects are required to meet minimum export target as specified in SMEFD Circular Letter No. 05, 2011 on staggered basis in four years.

  • Maximum financing for a single export oriented project is Rs. 5.00 billion.

  • Maximum 10 years including a grace period up to 2 years.

  • Maximum Financing rate for End User is SBP Policy rate minus 3%.

  • The prevailing Profit Rates and Guidelines issued by SBP will be applicable and that may vary from time to time, as and when revised by SBP.

  • Eligible customer and SBP Scheme details: https://www.sbp.org.pk/smefd/circulars/2018/C1-Annex-I.pdf

• Details of Shariah Compliant financing products (but not limited to)

  • Working Capital Requirement – Short Term Financing

    • Murabaha: Murabaha means a sale of goods by one person to another under an arrangement whereby the seller is obliged to disclose to the buyer the cost of goods sold either on cash basis or deferred payment basis and a margin of profit included in the sale price of goods agreed to be sold.

    • Istisna’a: Istisna’a is a mode of sale, at an agreed price, whereby the buyer places an order to manufacture, assemble or construct, or cause so to do anything to be delivered at a future date. The commodity must be known and specified to the extent of removing any ambiguity regarding its specifications including kind, type, quality and quantity etc. Price of the goods to be manufactured must be fixed in absolute and unambiguous terms. The agreed price may be paid in lump sum or in installments in the manner mutually agreed by the parties.

    • Tijarah: Tijarah Finance is a Sale (Musawamah basis) + agency (Wakeel) based financing facility where the interested client intends to sell their finished goods on credit basis. The core aim of Tijarah is to facilitate the customers to sell their existing owned assets to generate cash for meeting their working capital requirements and take advantage of cash sales. In Tijarah, the Bank will buy finished goods from the sellers (customer) and then appoint those customer agent(s) of the Bank through restricted agency agreement to sell out the same in open market not less than a minimum price determined in agency agreement to be returned to the Bank as per agreed schedule.

    • Salam: Salam (advance payment against deferred delivery of goods) means a kind of sale whereby the seller undertakes to supply specific goods to a buyer at a future date in consideration of a price fully paid in advance at the time the contract of sale is made. The specifications, quality and quantity of the commodity must be determined to avoid any ambiguity which could become a cause of dispute. Date and place of delivery must be agreed upon but can be changed with mutual consent of the parties.

    • Trade Musharakah: The Bank and the Customer will enter Musharakah, based on Shirkat‑ul‑Aqd wherein (a) the Bank and the Customer will invest in the identified primary Operating Activities (or any identifiable segment thereof) of the Customer’s business and (b) participate in the profits/(loss) generated by the Musharakah in proportion to their respective investment ratio.

  • For Purchase of Plant and Machinery – Long Term Financing

    • Diminishing Musharakah: Diminishing Musharakah (DM) is commonly used for financing the fixed assets. It is a form of co‑ownership in which two or more persons share the ownership of a tangible asset in an agreed proportion and one of the co‑owners undertakes to buy in periodic installments the proportionate share of the other co‑owner until the title to such tangible asset is completely transferred to the purchasing co‑owner. Diminishing Musharakah can be created only in tangible assets. The amount of periodic payment would go on decreasing with purchase of ownership units by the purchasing co‑owner.

• Other Trade Related Services offered by BOK (but not limited to)

  • Letter of Credit (Sight/Usance)

    Letter of credit is a written undertaking by a bank (known as the issuer) to pay a specified sum of money to a seller (the beneficiary) on behalf of a buyer (the applicant). This payment is guaranteed to be made once the seller presents a set of documents that strictly comply with the terms and conditions outlined in the LC.

  • Export Bill for Collection

    It is a method of payment in international trade where an exporter's bank (the remitting bank) acts on behalf of the exporter to collect payment from the importer (buyer) via the importer's bank (the collecting bank).

  • Letter of Guarantee

    It is a financial instrument issued by a bank or other financial institution on behalf of a client (the applicant) to a third party (the beneficiary). It is a formal, legally binding promise that the bank will pay a specified amount of money to the beneficiary if the applicant fails to fulfill a specific financial or contractual obligation.

  • Forward Purchase of FCY

    It is a financial agreement where two parties (typically a business and a bank) agree to exchange a specified amount of one currency for another on a future date at an exchange rate that is fixed today.

For more details, please visit any nearest branch of Bank of Khyber. For branch location details, click on the link https://www.bok.com.pk/location-map