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  • SBP issues guidelines for e-commerce exporters

    SBP issues guidelines for e-commerce exporters

    KARACHI: State Bank of Pakistan (SBP) on Wednesday issued guidelines for e-commerce exporters in order to promote such exports from Pakistan.

    The SBP said that in order to promote Business-to-Consumer (B2C) e-Commerce exports from Pakistan, State Bank of Pakistan has reviewed the aforementioned instructions to align these with the changing business dynamics of e-commerce exports.

    For this purpose, a separate Module to implement e-commerce exports has also been developed in WeBOC in collaboration with Pakistan Customs and other relevant stakeholders.

    Accordingly, a revised regulatory framework has been developed keeping in view the current business needs of e-commerce exports, which would replace the existing Para 39 Chapter 12 of FE Manual.

    The revised framework is given hereunder:

    Business-to-Consumer (B2C) E-Commerce Exports

    (i) Forms Prescribed for Declaring E-Commerce Exports:

    As per Federal Government Notification No. I(6)-ECS/48, dated the July 1, 1948, a declaration is required to be furnished by the exporter at the time of exports to the Collector of Customs that an amount representing the full export value of the goods has been or will be disposed of in a manner and within a period specified by the State Bank of Pakistan. In case of e-commerce exports, the declaration required to be furnished by the exporter shall be filed by the courier, in the prescribed format, on behalf of the exporter in the E-Commerce export module of the WeBOC. For exports other than through E-Commerce module of WeBOC, Form-E shall continue to be issued by Authorized Dealers at the request of the exporters as per the existing prescribed instructions.

    (ii) Registration/ Due Diligence of the E-Commerce Exporters in WeBOC by Authorized Dealer

    Authorized Dealer, upon receipt of request along with an undertaking from the exporter as per Annexure-A, shall register the exporter in the B2C E-Commerce module in WeBOC after performing the due diligence of the customer, as per applicable instructions on managing ML / FT risk.

    Authorized Dealers handling the E-Commerce export related transactions are responsible to carry out customer’s Risk Profiling and its periodical monitoring to ensure that any ML/ FT risk is timely and appropriately identified and managed in accordance with the risk management policy of the authorized dealer. The ADs may add a separate section for e-Commerce in their Risk Management Policy to manage ML/ FT risk.

    (iii) Shipment in WeBOC through Couriers registered by Pakistan Customs

    The exporter shall submit their export consignment along with required details to any courier of their choice, registered with Pakistan Customs in WeBOC. The courier handling the export shipment shall file the Goods Declaration to Pakistan Customs on behalf of the exporter. Each individual consignment shall be identified on the basis of unique House Airway Bill (HAWB) Number as per the format prescribed by Pakistan Customs. The value of each consignment should be based on the actual price of the product as per the invoice issued to customer and must not exceed USD 5,000. The detail of export shipments shall be accessible to the Authorized Dealer in the E-Commerce profile of the exporter in WeBOC after the shipment of goods from Pakistan.

    (iv) Method and Period for Realization of Export Proceeds

    Full export value of goods exported from Pakistan and declared to the Customs authorities by courier companies on behalf of E-Commerce exporters, adjusted for any permissible discount as per sub-para vi below, should be received on the due date for payment or within 60 days from the date of shipment, whichever is earlier. The export proceeds should be received from abroad by an Authorized Dealer, through banking channel or international payment scheme/gateway, either in foreign currency, in which the Authorized Dealer maintains accounts, or in Pakistan Rupee from Non-Resident Rupee Account Repatriable or NRP Rupee Value Account.

    (v) Monthly Reconciliation Statement of E-Commerce Exporters

    Exporter shall be required to submit a monthly statement to the Authorized Dealers, in physical/electronic form, giving details of proceeds realized against the export shipments as per prescribed format given at Annexure-Balong with the relevant invoices. The Authorized Dealer will use the data provided in the format to mark the realization of outstanding export shipments in WeBOC, as per procedure given in sub-para vii below. The statement shall be submitted by the exporters within five (5) working days from the end of month to which the statement pertains. Authorized Dealer would promptly follow up with the exporter if the statement is not submitted as per prescribed timeline.

    (vi) Remittance of Foreign Expenses and Retention in Exporters’ Special Foreign Currency Account

    Authorized Dealers are permitted to allow payment of commission/charges/discounts/bank charges due to foreign importers/agents/financial institutions by E-Commerce exporters in Pakistan up to 10% of the invoice value of goods. In cases where the exporter is not required to pay any of the above expense or pay an amount less than above mentioned maximum permissible limit such amounts of commission/discount etc. or differential, not exceeding the 10% limit, can be retained in exporter’s foreign currency retention account with Authorized Dealers in Pakistan. The funds held in such foreign currency accounts can be used by the exporters for payment abroad on account of marketing /promotion and other services related to e-commerce exports. The account can also be used for settlement of overdue/ shortfall export proceeds, replacements etc., and other permissible purposes under the relevant regulations.

    (vii) Realization against E-Commerce Export Shipments

    Authorized Dealer will record proceeds realization against each HAWB in E-Commerce Bankers’ Credit Advice (BCA) module in WeBOC through the following options:

    Settlement against 100% Realization.

    Settlement with discount/commission etc. (up to 10%).

    Settlement with Proceeds from Exporters Foreign Currency Retention Account including partial/ short realization.

    Settlement against Advance Payments.

    Settlement against replacement/ repaired/ faulty goods.

    (viii) Handling of Overdue Cases

    Authorized Dealers shall monitor the non-realization or delay in realization of export proceeds by E-Commerce exporters beyond the prescribed period of 60 days from the date of shipment of goods through WeBOC.

    In case the outstanding export bills aggregating to USD 20,000/- or above are not realized within 60 days from the date of shipment (as per WeBOC data), as at the end of respective month, Authorized Dealer shall mark the exporter’s status as ‘Suspended’ in the E-Commerce module of WeBOC. This ‘Suspended’ status shall be marked by 15th of the following month after taking into account the monthly statement of proceeds realization filed by the exporter, as per Para v above. This would debar the exporter from further exports through E-Commerce module.

    The status of exporter may be restored by Authorized Dealer to ‘Active’ in the WeBOC at any time during the month subject to realization of outstanding export bills, unrealized for 60 days or more from the date of shipment, provide the aggregate amount of such outstanding bills becomes less than USD 20,000/-.

    In case of non-realization or delay in realization of export proceeds beyond 90 days from the date of shipment (as per WeBOC data), as of month end date, the same shall be reported as ‘overdue’ to SBP-Banking Services Corporation (Annexure C), as per guidelines prescribed in Para 33, Chapter 12 of FE Manual. However, the shipments overdue on month end and subsequently marked realized in the WeBOC, on the basis of monthly proceeds realization statement submitted by the exporter, should be excluded from such reporting.

  • SBP makes mandatory for banks to construct ramps for disable persons

    SBP makes mandatory for banks to construct ramps for disable persons

    KARACHI: State Bank of Pakistan (SBP) on Monday made it mandatory for all banks to construct ramps at their branches for persons with disabilities.

    The SBP said it had decided to make it mandatory for all banks/ MFBs/ DFIs to construct ramps at all newly opened and existing place of business (excluding Mobile Banking Units) to make it accessible for persons with disabilities and wheelchair users.

    For the purpose, a 2-year time-bound action plan to construct ramps at your all-existing places of business shall be submitted to SBP by December 31, 2020.

    In addition, a senior level management committee of the respective banks, MFBs and DFIs shall be constituted who will be responsible for monitoring the overall progress on the action plan.

    Further, the quarterly implementation report should be submitted within 15 days after the end of each quarter.

    The SBP further said that instructions issued vide CPD Circular No. 06 of 2014 requiring banks/MFBs to provide visually impaired/blind persons with equitable access to banking and financial services, the banks have also been advised to submit the compliance status by December 31, 2020.

  • SBP directs banks to extend working hours for duty, tax collection

    SBP directs banks to extend working hours for duty, tax collection

    KARACHI: State Bank of Pakistan (SBP) on Sunday directed all banks to observe extended working hours to facilitate collection of duty and taxes on Monday November 30, 2020.

    A notification issued by the central bank, stated that in order to facilitate the collection of government receipts / duties / taxes, it has been decided that the field offices of SBP Banking Services Corporation (SBP-BSC) and authorized branches of National Bank of Pakistan (NBP) will observe extended banking hours till 9:00 PM on November 30, 2020 (Monday) for which purpose a special clearing has been arranged at 6:00 P.M. on the same day by the NIFT.

    All banks are, therefore, advised to keep their concerned branches open on November 30, 2020 (Monday) till such time that is necessary to facilitate the special clearing for Government transactions by the NIFT.

  • Country’s weekly foreign exchange reserves increase by $467 million

    Country’s weekly foreign exchange reserves increase by $467 million

    KARACHI: The liquid foreign exchange reserves of the country have increased by $467 million to $20.552 billion by week ended November 20, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.085 billion by week ended November 13, 2020.

    The official reserves of the SBP increased by $484 million to $13.415 billion by week ended November 20, 2020 as against $12.931 billion a week ago.

    The SBP attributed the increase to official government inflows.

    The reserves held by commercial banks eased by $17 million to $7.137 billion by week ended November 20, 2020 as against $7.154 billion a week ago.

  • SBP keeps key policy rate unchanged at 7 percent

    SBP keeps key policy rate unchanged at 7 percent

    KARACHI: The monetary policy committee of the State Bank of Pakistan (SBP) has decided to keep the key policy rate unchanged at 7 percent for next two months.

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  • SBP announces incentives for banks to finance low cost housing

    SBP announces incentives for banks to finance low cost housing

    KARACHI: The State Bank of Pakistan (SBP) on Friday amended regulations to incentivize banks for financing low cost and affordable housing.

    A statement said that the central bank is constantly providing enabling regulatory environment to promote housing and construction finance.

    This is an important sector that has significant economic linkages with other sectors in the economy and the current level of credit provision in this sector is at a very low level of less than 1 percent of GDP which is much lower than in other similar countries and in the region.

    To support the provision of finance to this sector and especially facilitate affordable housing, SBP has now announced five regulatory relaxations to incentivize banks for financing low cost and affordable housing.

    Firstly, the definition of low cost housing finance used in the current regulations for banks has been aligned with definition used under Government Markup Subsidy Facility for Housing Finance eligible under Tiers I & II of housing finance.

    Specifically, in the SBP regulations, the value of housing unit has been increased from Rs 3 million to Rs 3.5 million with maximum loan size increased from Rs 2.7 million to Rs 3.15 million. Consequently, the incentive for low cost housing finance will increase for banks as they will not only be able to enjoy markup subsidy facility by the Government but the regulatory incentives under low cost housing finance by SBP as well.

    Current regulations and banking practices require banks to obtain documentary evidence of income. Provision of this information is difficult for people generating income from informal sources which are generally in low income segments.

    In order to facilitate financing for this segment, State Bank is urging the banks to use alternate methods to identify income sources and assess the credit worthiness of the borrower.

    The 2nd and 3rd type of relaxations are being given to facilitate financing for this segment. Accordingly, under 2nd relaxation, banks have been exempted from the requirement of using ‘verifiable income’ for the purpose of calculating Debt Burden Ratio (DBR) in case of low cost housing finance where banks are using income proxies and where income of borrower is not verifiable.

    Resultantly, borrowers with ‘non-verifiable income,’ estimatedby banks using income proxies, will also become eligible to avail low cost housing finance.

    Thirdly, banks have also been exempted from the requirement of observing DBR, in case of low cost housing finance, where banks are using repayment surrogates like rent, utility bills, telcos bills, etc. to assess repayment capacity of borrower. Hence, borrowers without verifiable or non-verifiable income will become eligible to avail low cost housing finance.

    Fourthly, banks have been exempted from the requirement of Internal Credit Risk Rating System for the low cost housing finance till September 30, 2022 as their current systems do not specifically cater for low cost housing finance.

    Accordingly, borrowers of low cost housing finance who cannot avail financing due to banks internal credit rating criteria will now become eligible if the bank is otherwise satisfied. This time barred relaxation will provide banks to develop their Internal Credit Risk Rating Systems for low cost housing finance.

    Finally, in order to provide comfort to the borrowers who have liquid securities or already have a housing unit, banks have been allowed to extend housing finance for purchase/construction of a residential property by accepting existing residential property or liquid securities in lieu of equity contribution for housing finance at the time of calculations of Loan to Value ratio.

     Financing bank will create its lien on existing residential property/liquid securities in addition to mortgage of residential property being financed.

    It is expected that the above regulatory incentives would provide further impetus to SBP’s on-going efforts to accelerate housing and construction finance in Pakistan. It is reminded that banks have already been given mandatory targets of 5 percent of their private sector advances as housing and construction finance by December 31, 2021.

  • SBP to issue monetary policy statement on Nov 23

    SBP to issue monetary policy statement on Nov 23

    KARACHI: State Bank of Pakistan (SBP) will announce monetary policy for next two months on Monday November 23, 2020, a statement said on Thursday.

    The SBP said that the Monetary Policy Committee of the SBP will meet on Monday, November 23, 2020 at SBP Karachi to decide about Monetary Policy.

    Later on, SBP will issue the Monetary Policy Statement on the same day.

    In its previous monetary policy statement on September 21, 202, the central bank kept the policy rate unchanged at 7 percent.

    Manual tax collection to be eliminated by January: SBP
  • Pakistan’s foreign exchange reserves cross $20 billion

    Pakistan’s foreign exchange reserves cross $20 billion

    KARACHI: The liquid foreign exchange reserves of the country have crossed over $20 billion by week ended November 13, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country increased by $178 million to $20.085 billion by week ended November 13, 2020 as compared with $19.907 billion a week ago.

    The foreign exchange reserves of the central bank increased by $190 million to $12.931 billion by week ended November 20, 2020 as compared with $12.741 billion a week ago.

    The foreign exchange reserves held by commercial banks fell by $12 million to $7.154 billion by week ended November 13, 2020 as against $7.166 billion a week ago.

    FBR extends date for filing income tax returns up to November 30
  • Over 100,000 potential overseas job losses for Pakistanis due to COVID

    Over 100,000 potential overseas job losses for Pakistanis due to COVID

    KARACHI: The official estimates of Bureau of Immigration and Overseas Employment (BEOE) revealed that over 100,000 overseas job for which the recruitment process was going on in Pakistan, was disrupted due to COVID and is not going to recover unless the recruiting projects are revived.

    The bureau categorizes this category as a potential loss, according to a report of State Bank of Pakistan (SBP) released on Wednesday.

    According to the official estimates of BEOE, more than 8.8 million Pakistanis were living abroad as of December 2017. Of these, 54 percent resided in the Gulf region, and the rest in other destinations, including Europe, UK, US, Canada, and Australia.

    Furthermore, during the last three years, around 1.7 million people left for different destinations, of which around 98 percent proceeded for employment in the Gulf region and only a small fraction went to acquire permanent residency in high-income countries.

    During the Covid-19 crisis, BEOE records reveal multiple channels of potential job losses for migrant Pakistanis.

    Around 50,000 Pakistani migrants faced layoffs in different countries. These jobs may not be recovered in the short term and are thus extremely vulnerable.

    Around 60,000 Pakistanis were recruited for overseas work, but could not proceed abroad due to travel restrictions and suspension of flight operations. The Bureau also categorizes these jobs as extremely vulnerable.

    In addition to these, 50,000 emigrants (Azaad Visa excluded) returned on paid/unpaid leaves as of June 2020. These workers have not been laid off, but their job continuation entails risk.

    For most of the returning workers, the lockdowns resulted in permanent cessation of income along with the loss of legal status and end of accommodation and health benefits associated with employment. In case of forced dismissals, workers also did not receive compensation, and other dues and therefore found it difficult to arrange travel expenses on their own.

    The recent figure of stranded Pakistanis in different destinations is highly skewed towards the Gulf region with more than 91 percent in only two countries, i.e., Saudi Arabia and the UAE.