SBP imposes mark lien on delayed export inflows State Bank of Pakistan

SBP imposes mark lien on delayed export inflows

The State Bank of Pakistan (SBP) has imposed a mark on lien for exporters who fail to realize export money within the prescribed time frame.

As per the Foreign Exchange Circular No. 01 dated February 13, 2023, the central bank has issued instructions relating to delayed realization of export proceeds by exporters.

READ MORE: PBC raises concerns over proposed requirement of beneficial owner records

In cases where export proceeds are realized after the prescribed period, the AD (Authorized Dealer) shall mark a lien on the amount of export proceeds realized by the exporter, with a percentage of the amount to be marked under lien increasing as the number of days delayed increases.

The AD shall credit the export proceeds at the prevailing market exchange rate into the exporters’ account and release the remaining amount to the exporter after depositing the fine imposed by the Foreign Exchange Adjudication Department (FEAD) with the SBP.

READ MORE: Property prices register 15% decline owing to heavy taxes, political uncertainty

The instructions do not apply to export bills or export receivables discounted by the exporter to the AD. However, exporters who bring their delayed export proceeds to Pakistan by April 30, 2023, will not face any deductions, and their export proceeds will be converted into PKR and released to them as normal.

It has also been decided to further amend the instructions conveyed vide above mentioned circular and accordingly paragraph 33A, Chapter 12 of FE Manual has been revised, as under:

READ MORE: Bank borrowing by private sector plunges by 77% in Pakistan

“33A Delayed Realization of Export Proceeds

In cases where export proceeds (fully or partially) are realized after the prescribed period (as stipulated in Para 6 of this Chapter), the AD shall convert the export proceeds at the prevailing market exchange rate, credit the same into the exporters’ account and subsequently adopt the following procedure:

The AD shall mark a lien on the amount of export proceeds realized by the exporter, as mentioned below:

Number of days export proceeds is delayedPercentage of amount to be marked under lien
Up to 30 days3%
From 31 to 60 days6%
Beyond 60 days9% 

A consolidated statement regarding all such liens by the bank will be submitted by Head/Principal Offices of the banks to the Director, Foreign Exchange Operations Department (FEOD), SBP-BSC on weekly basis.

FEOD shall file a complaint to Foreign Exchange Adjudication Department (FEAD), SBP-BSC with respect to delay in realization of export proceeds for all reported cases.

READ MORE: Pakistani exchange companies demand regulations for cryptocurrencies

Subsequently, banks shall deposit the fine as ordered by FEAD with SBP (out of the amount marked under lien as per paragraph (a) above) and release the remaining amount to the exporter. In case FEAD does not impose any fine on the exporter, the entire amount under lien would be released to the exporter.

The above instructions will not be applicable in cases of export bills/ export receivables that are discounted by the exporter to the AD.