SBP's new mechanism allows businesses to pay for global digital services

(Karachi) As part of a new mechanism, the State Bank of Pakistan (SBP) has enabled companies in the country to make instant payments for acquiring digital services from globally recognized digital service providers without any hassle. The SBP's move aims to further enhance ease of doing business in Pakistan.

2/2 A simplified process on ‘payment vs receipt’ basis has been introduced with annual limits. Banks can release foreign exchange up to a maximum of $200,000 per year for each entity. For details: https://t.co/pJTapMaTZJ

— SBP (@StateBank_Pak) August 13, 2020

In a tweet by SBP, it stated that local companies can now access various services including advertising, hosting, database access, accounting management, skill development and customer support from global companies instantaneously without any regulatory approval process.

The SBP introduced a simplified process on ‘payment vs receipt’ basis with annual limits. Banks can release foreign exchange up to a maximum of $200,000 per year for each entity.

Earlier in November 2019, the SBP had introduced a framework for acquisition of services from abroad allowing companies to acquire services after registration of its contract with the bank.

However, the mechanism proved difficult for some businesses for making payments to digital service provider companies. After holding discussions with the stakeholders, a simplified process on ‘payment vs receipt basis’ has been introduced with annual limits, in addition to the existing framework.