Tag: SBP

KARACHI: State Bank of Pakistan (SBP) has issued instructions to banks related to issuance of remittances for Hajj expanses and their repatriation on non-utilization.

The SBP issued a circular dated June 03, 2022 invited attention of banks to Para 45A, Chapter 17 of Foreign Exchange Manual in terms of which Authorized Dealers are allowed to make remittances in foreign exchange to Kingdom of Saudi Arabia on behalf of Hajj Group Organizers (HGOs) subject to compliance of applicable terms and conditions.

The SBP said in order to facilitate the HGOs to effect Hajj related remittances, Para 45(A) (v), Chapter 17 of Foreign Exchange Manual stands amended as per following:

“45A. Remittances by Authorized Dealers on behalf of Hajj Group Organizers for Hajj.

(v)(a) Authorized Dealers may also effect Hajj related remittances, on behalf of HGOs, to Tawafa/Hajj service providers duly designated by the Saudi Arabian Hajj Authorities. The remittances will be made on receipt of following information/ documents by Authorized Dealers:

— Details of Hajj Package bifurcating local and foreign expenses per pilgrim in terms of related Hajj Package(s).

— Undertaking from concerned HGO for repatriation of funds in case of non-utilization.

(b)It will be the responsibility of the banks to satisfy themselves about the bona fides of the transaction.”

Prior to the amendment, the Para 45A of Chapter 17 of the Foreign Exchange Manual is as:

“45A. Remittances by Authorized Dealers on behalf of Hajj Group Organizers for Hajj.

(i) Authorized Dealers may remit foreign exchange on behalf of the Hajj Group Organizers (HGOs) having been allocated quota by the Ministry of Religious Affairs & Interfaith Harmony (MoRA) under the Private Hajj Scheme for respective Hajj season subject to terms and conditions mentioned below. Authorized Dealers may obtain list of enlisted HGOs along with allocated quota in respect of each HGO from MoRA.

Authorized Dealers, on being approached, shall either open a PKR Account in the name of concerned HGO with suffix “Hajj” or use the previously opened similar account specifically for the purpose of Hajj related remittances to Saudi Arabia subject to the following:

a) While opening/activating and operating these accounts, Authorized Dealers shall strictly follow SBP’s AML/KYC guidelines and ensure compliance of all related rules and regulations issued from time to time. They shall obtain all necessary documents from the concerned HGO.

b) For the purpose of effecting Hajj related remittances to Saudi Arabia, each HGO is permitted to maintain only one account with the Authorized Dealer of its choice. In this respect, Authorized Dealer shall obtain an undertaking from the HGO that it is not maintaining such account with any of the other Authorized Dealers or any other branch of the same Authorized Dealer for this purpose.

(ii) With respect to the operations of the designated accounts of HGOs in Pakistan, the Authorized Dealers will ensure that permissible deposits shall only be the PKR funds received from intending pilgrims by the HGOs. The Authorized Dealers shall obtain the list of intending pilgrims from concerned HGOs containing at least the below-mentioned details:

a) Name, address and contact details.

b) Passport No. &

c) HGO Hajj Package opted (Amount of Hajj Packages).

(iii) Authorized Dealers shall allow remittances into HGO’s account maintained with a specified Saudi bank against the PKR funds collected by HGOs in terms of sub-para (ii) above. However, in case where an HGO has not been able to open/operate account in Saudi Riyal with a Saudi bank, the remittances may be allowed directly to vendors/service providers in Saudi Arabia through FDD/TT/SWIFT. In this context, Authorized Dealers must ensure the following:

a) The remittances shall only be made for meeting expenses related to housing, Maktab, catering, transportation, guides, subsistence requirements and charges of the Ministry of Hajj in respect of intending pilgrims performing Hajj from the quota allocated to the concerned HGO against authenticated underlying contracts with service providers in Saudi Arabia and submission of following information/documents by the respective HGOs:.

(aa) Detail of Hajj Package bifurcating local and foreign expenses per pilgrim.

(bb) Quota Allocation letter by MoRA for respective Hajj season.

(cc) Invoice(s) issued by Saudi vendors in favor of which remittance is being made or FDD is being issued. However, in case final invoices are not available with the HGOs, the Authorized Dealers will ensure submission of related invoices etc. after finalization of the contracts and will allow remittances after due diligence of contracts.

b) The HGOs shall provide per pilgrim per service foreign exchange requirements to Authorized Dealers for the services mentioned at (a) above in terms of related package. Authorized Dealers shall make remittances for such services after due verification keeping in view the total quota allocated to the concerned HGO under the Private Hajj Scheme for the concerned Hajj season. However, in any case, total remittances per pilgrim into account of HGO/direct payments to vendors in Saudi Arabia should not exceed 80% of the Hajj Package being offered to the individual pilgrim.

c) In case aggregate remittance against all services by an HGO on any given day exceeds US$ 100,000/-, the concerned HGO will approach Exchange Policy Department, State Bank of Pakistan, Karachi along with related details and Form ‘M’ through the concerned Authorized Dealer for prior approval.

d) Head/Principal Offices of Authorized Dealers shall submit consolidated report in respect of remittance transactions to the State Bank executed on behalf of HGOs on or before the 5th day of the following month as per the prescribed format (Appendix V-140) at the email ID: [email protected]. Further, Authorized Dealers shall maintain complete record of these transactions for SBP’s inspection.

e) It is mandatory for HGOs to repatriate the un-utilized amount to their designated bank accounts in Pakistan after completion of Hajj season. The respective Authorized Dealer shall ensure compliance of the same. Further, HGOs shall have the option to withdraw or transfer remaining PKR funds from these accounts to any other PKR account in Pakistan.

(iv) Further, in order to facilitate the HGOs to make arrangements of Maktab, housing, catering, transportation, guides, etc. in Saudi Arabia, Authorized Dealers may make advance remittances on behalf of HGOs upto 30% of the Hajj Package being offered by them to the individual pilgrims. The remittances will be made on submission of the following information/documents by the respective HGOs:

(a) Authenticated underlying contract with Saudi vendor/service provider.

(b) Details of Hajj Package bifurcating projected local and foreign expenses per pilgrim.

(c) Quota Allocation letter by the Ministry of Religious Affairs & Interfaith Harmony for previous Hajj season.

(d) Undertaking from concerned HGO for repatriation of funds in case of non-performance.

(e) Invoice(s) issued by Saudi vendors/service providers in favor of which advance remittance is being made. However, in case final invoices are not available with the HGOs at the time of remittance, the Authorized Dealers will ensure receipt of related invoices subsequently.

v) In addition to the above, Authorized Dealers may also effect Hajj related remittances into United Agents Office, Saudi Arabia’s IBAN maintained on behalf of each HGO with the External Hajj e-Service Portal. The remittances will be made on submission of following information/ documents by the respective HGOs:

a) Details of Hajj Package bifurcating local and foreign expenses per pilgrim in terms of related Hajj Package(s).

b) Undertaking from concerned HGO for repatriation of funds in case of non-utilization.

vi) Authorized Dealers must ensure receipt of all related invoices/e-invoices/vouchers, etc. from concerned HGO after finalization of the contracts, reconcile each transaction subsequently and comply with all instructions including those mentioned at Para (iii) above.

vii) While processing advance remittance request, the Authorized Dealer will take all possible measures to verify the bonafides and genuineness of the transaction. In case of non performance of contract for any reason, the Authorized Dealer and HGO will ensure repatriation of advance payment before completion of respective Hajj season.

viii) In the case of repatriation of advance payment, exchange gain, if any, will not be passed on to the HGO, rather the same will be deposited in favor of State Bank of Pakistan. To this effect, the Authorized Dealer should get consent/agreement signed by the concerned HGO at the time of effecting remittance. The exchange gain should be deposited in favor of the State Bank through RTGS Clearing Account No. 427518. In this respect, a consolidated statement regarding all such cases will be submitted by Head/Principal Offices of the Authorized Dealers to the Director, Foreign Exchange Operations Department, SBP-Banking Services Corporation on monthly basis as per prescribed format (Appendix V-141).