SBP advises banks to issue digital verification for remittances State Bank of Pakistan

SBP advises banks to issue digital verification for remittances

KARACHI: State Bank of Pakistan (SBP) has advised banks to issue digital verification for proceeds realization certificate (PRCs) against remittances.

In a move aimed at enhancing efficiency and convenience in the processing of inward remittances, the State Bank of Pakistan (SBP) issued a circular on Friday instructing banks to implement digital verification for proceeds realization certificates (PRCs). The directive emphasizes the transition to a fully digitalized system for the issuance and verification of PRCs related to remittances received from abroad.

The circular outlines that Authorized Dealers (ADs) and banks must ensure the implementation of digital issuance and verification of electronic PRCs (ePRCs) and the Statement of PRCs (S-PRCs) by August 29, 2022. This marks a significant step towards streamlining the remittance process and reducing the bureaucratic hurdles associated with manual verification.

As part of the guidelines, a new paragraph (2A) has been inserted in Chapter 10 of the Foreign Exchange Manual, outlining the process for the issuance of electronic PRCs. The circular specifies that ADs may issue ePRCs upon the realization of funds received from abroad, following the standard format provided in Annexures V-148 and V-149 for e-PRCs and S-PRCs, respectively.

The SBP has introduced two models for the issuance of ePRCs – the ‘same bank model’ and the ‘different bank model.’ Under the same bank model, if the beneficiary maintains an account in the same bank where the funds are received, the bank will issue the ePRC and S-PRC either to the registered email address or through its online issuance portal.

On the other hand, the different bank model applies when the beneficiary does not hold an account in the bank where the funds are received. In this scenario, the recipient or intermediary bank is responsible for transmitting the remittance amount to the beneficiary’s bank, which will then issue the ePRC and S-PRC based on transactional information received.

The circular also addresses cash over the counter (CoC) transactions, stating that ADs may ask customers for their email addresses to send ePRCs. In the absence of an email address, the AD must provide a physical PRC while disbursing cash.

Notably, the requirement of issuing e-PRCs in duplicate, as per previous SBP instructions, has been withdrawn. Banks are now required to ensure complete information is provided in the standard formats of e-PRC and S-PRC to avoid any inconvenience to customers.

To further streamline the process, banks are instructed to align with verifying agencies and record the purpose of each ePRC and S-PRC in the portal. The circular also mandates the appointment of a focal person within ADs to facilitate the issuance and verification of these certificates.

As Pakistan moves towards a more digitized financial ecosystem, this directive from the SBP is expected to not only simplify the inward remittance process but also contribute to the overall efficiency and transparency of the banking system. The banks are urged to familiarize their staff with the new procedures to ensure a smooth transition and better customer service.