Karachi, July 26, 2023 – The State Bank of Pakistan (SBP) has recently issued a set of comprehensive instructions regarding the import of cash US dollars through cargo or security companies.
This move comes as the central bank aims to regulate and monitor the flow of foreign currency in the country.
READ MORE: Private Sector Loans Nose-Dive 87% in FY23 Due to High Interest Rates and Slowdown
According to the new guidelines, exchange companies are allowed to import cash US dollars based on the need, but only against the value of their export consignments of permissible foreign currencies. This arrangement is to be carried out within five working days and must be executed through reputable cargo or security firms.
The SBP clarified that this arrangement will be in effect initially until December 31, 2023, with a specific condition that restricts the total cash US dollars imported by an exchange company during this period to not exceed 50% of the value of its export consignments.
READ MORE: SBP Commits Not to Launch New Refinancing Schemes, IMF Country Report States
For smooth implementation, exchange companies must include this new arrangement in their deals with overseas entities. The deal ticket generated by the system should also contain the details of any amount to be imported as cash US dollars, if applicable, out of the total export consignment.
To ensure transparency and compliance, exchange companies are required to provide prior written notice to the Director of the Foreign Exchange Operations Department (FEOD) at the SBP Banking Services Corporation (SBP-BSC) in Karachi, along with a copy to the SBP-BSC staff at the SBP-Customs Joint Booth at designated airports when importing US dollars cash through their cargo or security companies.
Moreover, they must submit the original deal ticket from the foreign bank or exchange company, clearly indicating the amount of cash US dollars being imported. Additionally, an Annexure-8 must be filled, signed, and stamped by SBP-BSC officials at the booth after verification. Furthermore, the original export documents from the foreign government’s customs and/or other relevant export documents must also be submitted and stamped by SBP-BSC officials. Exchange companies are required to maintain a copy of these signed and stamped documents for on-site inspection by the State Bank’s inspection team.
READ MORE: IMF Warns of Exceptionally High Economic Risks in Pakistan
The imported consignment will be verified following the procedure specified for the export of foreign currencies. After verification, the consignment will be repacked, sealed, and handed over to the cargo or security company for onward delivery to the exchange company.
As part of the instructions, exchange companies are expected to comply with all relevant laws and regulations, including those of the jurisdiction from which the US dollars cash is being imported. Furthermore, they must ensure that all transactions related to the import of cash are accurately reflected in their books of accounts.
READ MORE: Foreign Direct Investment Plunges by 25% in Pakistan During FY23
These new guidelines seek to streamline the import of cash US dollars and enhance transparency in foreign currency transactions, while also ensuring compliance with regulatory requirements. Exchange companies are urged to promptly adopt and implement the prescribed procedures to avoid any discrepancies and facilitate smooth operations within the specified timeline.