KARACHI: State Bank of Pakistan (SBP) has enhanced scope of funds utilization in the foreign currency accounts in order to facilitate exporters.
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Accessing foreign currency accounts not under consideration: Dar
ISLAMABAD: Finance Minister Ishaq Dar Wednesday said that the government was not considering to access foreign currency accounts of depositors because these are property of the citizens.
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SBP introduces foreign currency, rupee value business accounts
KARACHI: The State Bank of Pakistan (SBP) has announced a new category of foreign currency and rupee value business accounts to enhance financial inclusion and facilitate non-resident Pakistani investors.
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No plan to freeze foreign currency accounts: SBP
KARACHI: The State Bank of Pakistan (SBP) on Monday rejected rumors related to freezing foreign currency accounts.
The SBP in a statement said the government of Pakistan and the State Bank assure all account holders maintaining Foreign Currency Accounts (FCA), Roshan Digital Accounts (RDA) and Safety Deposit Lockers in banks in Pakistan that their accounts and lockers are completely safe, and that there is no proposal under consideration to put any restriction on them.
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Rumours are circulating on social media that the Government or State Bank is considering freezing or placing restrictions on withdrawals from Foreign Currency Accounts, Roshan Digital Accounts and Safety Deposit Lockers.
Such rumours are absolutely incorrect and baseless. It is clarified that such a proposal has neither been considered presently nor in the past.
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Moreover, foreign currency accounts including Roshan Digital Accounts are legally protected under the Foreign Currency Accounts (Protection) Ordinance 2001, and the Government and the State Bank are committed to protecting all the financial assets in Pakistan including the ones mentioned above.
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The Government and State Bank are taking all necessary measures to ensure macroeconomic stability in the country. The recent difficult decisions taken by the Government, including the reduction of subsidy on petroleum products, will pave the way to reach an agreement with the IMF and release of the IMF tranche and financial assistance from other multilateral agencies and friendly countries.
We are confident that these measures will relieve the temporary stress being faced due to elevated global commodity prices and geo political tensions, and eliminate uncertainty in the economy.
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SBP broadens utilization of foreign currency accounts for exporters
KARACHI: State Bank of Pakistan (SBP) has broadened the purposes for which the funds retained by exporters in the Special Foreign Currency Accounts (SFCAs) can be utilized.
Banks are allowed to make payment from the accounts for a number of new purposes in addition to existing ones, SBP said in a statement on Friday.
However, there is no change in the percentage of export proceeds allowed to exporters for retention in these accounts.
Exporters of goods and services, including IT based services, are allowed to retain a certain portion of their exports proceeds in their Special Foreign Currency Accounts. The fund from these accounts, however, could be utilized for specified purposes only.
Over time the types of payments that exporters need to make have increased as exports are becoming more diversified.
Exporters shall be able to use SFCAs to make payments abroad for a number of additional purposes including advertisement, promotion, marketing, brand building etc. abroad;subscription fee for participation in foreign exhibitions &fairs; payment for foreign consultant’s fee; travel expenses abroad; warehousing services, insurance expenses and shelf space expenses aboard; lab testing charges; audit/inspection/certification charges; logistics charges; refund of advance payment received against goods or services; payments for registration of patents, copyrights, drug registration, license fee etc.
Moreover, payment for acquisition of digital services from abroad, operational expenses of liaison/ marketing/ representative offices abroad etc. and investment in subsidiaries or joint ventures abroad can also be made using the funds held in above-mentioned accounts subject to applicable regulatory framework.
It is expected that the revised instructions would help a great deal to our exporters in promoting their products and brands abroad, which would not just increase their footsteps in foreign jurisdiction but would also increase their exports business. SBP would continue with its resolve to facilitate the business community, particularly the exporters, through creating an enabling regulatory environment conducive to fulfill their legitimate needs.
Relevant provisions of Chapter 12 of Foreign Exchange Manual have been updated, in this regard.
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Banks allowed opening foreign currency accounts of entities operating in STZs
KARACHI: State Bank of Pakistan (SBP) on Friday allowed commercial banks to open foreign currency accounts by entities operating under newly established Special Technology Zones (STZs)
The SBP in a notification said that in order to further the objectives of establishing the Special Technology Zones under the Special Technology Zones Authority Ordinance, 2020, it has been decided to issue special foreign exchange regulations for entities operating in Special Technology Zones in Pakistan, in terms of sub-section 5 of Section 19 of the Ordinance and in exercise of powers conferred under the Foreign Exchange Regulation Act, 1947.
Accordingly, the following new paragraph 9A has been inserted after paragraph 9 of Chapter 6 of Foreign Exchange Manual:
9A – Special Foreign Exchange Regulations for Special Technology Zones (STZs)
Authorized Dealers may open Special Foreign Currency Accounts of entities licensed by Special Technology Zones Authority (STZA) under the Special Technology Zones Authority Ordinance, 2020.
Such foreign currency accounts can be fed with any proceeds, in favor of the entity, originating from abroad including foreign borrowing, proceeds from exports of goods and services, foreign equity, earnings / profits of overseas offices / subsidiaries / associates established through funds from these accounts, without the requirement of conversion into PKR. However, these accounts cannot be fed with cash foreign currency or any foreign exchange purchased from an Authorized Dealer or an Exchange Company in Pakistan for any purpose.
The funds available in such foreign currency accounts may be used by the account holders for making all types of business related legitimate payments abroad without any limitation and without any approval from SBP, subject to completion of applicable documentary/reporting requirements under relevant foreign exchange regulations.
In case sufficient funds are not available in Special Foreign Currency Accounts of such entities, with any Authorized Dealer in Pakistan, for making any legitimate payment abroad in foreign exchange, these entities may be allowed to make entire payment of the underlying transaction by purchasing foreign exchange from interbank market, subject to compliance with applicable foreign exchange regulations. However, Authorized Dealers shall obtain an undertaking from such entities to the above effect.
In case any local payment is required to be made from Special Foreign Currency Accounts by such entities, the same shall be allowed by Authorized Dealers after converting the funds, available in such accounts, into PKR through inter-bank market. However, no cash withdrawal will be allowed in the shape of FCY notes.
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SBP allows opening foreign currency account to individuals holding POC
KARACHI: State Bank of Pakistan (SBP) on Tuesday allowed non-resident individuals holding Pakistan Origin Card (POC) to open foreign currency account.
The SBP said that as per FE circular No. 02 dated August 05, 2020, a non resident individuals is eligible to open foreign currency account.
The SBP clarified that an individual non-resident, holding Pakistan Origin Card (POC) is also eligible to open FCVA.
Accordingly, the existing Para 2 sub-para (i (a)) of the above Circular has been replaced with the following:
“Individual non-resident Pakistani and non-resident holding Pakistan Origin Card (POC).”
Consequently, all the provisions of FE Circular 2 of 2020 applicable to individual non-resident Pakistani shall also be applicable to non-resident holding Pakistan Origin Card (POC).
Moreover, in terms of Para 7, Chapter 22 of the Foreign Exchange Manual, Authorized Dealers are required to report inward remittance transactions, except for family maintenance and exports, exceeding USD 10,000/- on Form “R” to SBP.
In this regard, it is advised that instead of asking the customer to provide duly filled in Form ‘R’, the bank receiving remittances in FCVA exceeding USD 10,000, or equivalent thereof, may digitally obtain the information, required for filling Form “R”, from the customer/remitting bank, if not already available in the transaction detail, for the purpose of reporting of transactions to SBP.
Through another circular, the SBP clarified that non-resident holding POC also eligible for opening Rupee Value Account (NRVA).
Consequently, all the provisions of FE Circular 01 of 2020 applicable to non-resident Pakistani shall also be applicable to non-resident holding Pakistan Origin Card (POC).
Further, as per Para 7, Chapter 10 of the FE Manual, any person who wishes to purchase foreign exchange must lodge an application with an Authorized Dealer on Form ‘M’ for seeking approval to effect outward remittance.
However, in case of NRVA, since no approval is required to NRVA holder for repatriating the funds from his/her account, therefore Form ‘M’ may not be required for payment/ repatriation of funds from NRVA. Nonetheless, Authorized Dealers shall continue to report outward remittances under the specified purpose code through monthly foreign exchange returns to SBP as per the existing procedure.
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