State Bank allows Non-Resident Pakistani to open FCVA, NRVA

The State Bank of Pakistan (SBP) has now allowed Non-Resident Pakistani to open Foreign Currency Value Account (FCVA) and NRP Rupee Value Account (NRVA). The Non-Resident Pakistani however, must be a holder of Pakistan Origin Card (POC).

As per the central bank latest amendments in instructions regarding FCVA, SBP said that in terms of Para 2 sub-para (i (a)) of the FE Circular No. 2 dated August 5, 2020, “A non-resident individual Pakistani” is eligible to open a Foreign Currency Value Account (FCVA). It is 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.

Amendment in Instructions regarding NRP Rupee Value Account (NRVA)

The SBP has made a number of amendments in FE Circular No. 1 dated August 5, 2020. Under which, in terms of Para 2, sub-para ii (i (c)) of the above Circular, Authorized Dealers may open NRP Rupee Value Account (NRVA) of Non-resident Pakistanis only.

It is clarified that an individual non-resident, holding Pakistan Origin Card (POC) is also eligible to open NRVA. Accordingly, the existing Para 2 sub-para ii (i (c)) of the above Circular has been replaced with the following:

“NRP Rupee Value Account (NRVA) for individual Non-resident Pakistani and non-resident, holding Pakistan Origin Card (POC).”

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).

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 NRVA 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.

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.