- ECs will bring the export proceeds in their USD account maintained with banks in Pakistan within three days
KARACHI: The State Bank of Pakistan (SBP) has allowed Exchange Companies to export US dollar on consignment basis.
However, as per the SBP directives, ECs will bring the export proceeds in their USD account maintained with banks in Pakistan within three days.
As per Para 9 (IV0) Of Chapter 5 of Exchange Companies Manual, Exchange Companies are allowed to export foreign currencies other than USD and bring in equivalent USD in their foreign currency accounts maintained with banks in Pakistan.
Now, on the request of the Exchange Companies Association of Pakistan (ECAP), the SBP has allowed export of US dollars to improve the flow of foreign exchange.
“In order to enable Exchange Companies to divert the flow of foreign exchange mobilized by their interbank market, it has been decided to allow ECs to export USD on consignment basis through cargo or security company,” a circular issued by the SBP said. This facility will be available until September 30, 2022.
As per the SBP directives, Exchange Companies will ensure the availability of sufficient amounts of US dollar currency notes at their counters to meet the demand of the general public. In addition, the proceeds of such exports must reach the USD account Of ECs maintained with banks in Pakistan, within three days of such export and they - Exchange Companies - must surrender 100 percent of foreign exchange received on account of export of USD, in the interbank market the same day.
All other terms & conditions, as mentioned in Chapter 5 of Exchange Companies Manual for export of foreign currencies, will apply to such exports, it maintained.
Exchange Companies will be required to share data of such exports and its surrender on daily basis to the SBP, Banking Supervision Department.
Exchange Companies will also ensure availability of all relevant record for examination by State Bank’s inspection teams. Any violation of these instructions by Exchange Companies would attract enforcement action under the relevant provisions of the Foreign Exchange Regulation Act, 1947, the SBP warned.
Malik Bostan, Chairman, Exchange Companies Association of Pakistan (ECAP) has welcomed the SBP decision saying that this will help reduce the difference in the interbank and open currency market.
He said banks were not buying dollars from ECs and they were required to take prior permission from the SBP for export of US dollar.
Huge amounts of ECs were being stuck for at least five days due to previous process and they were facing huge loss due to decline in dollar rate.
Bostan thanked the SBP Governor Dr Murtaza Syed, Deputy Governor Inayat Hussain and other officials for permitting export of dollar.
Copyright Business Recorder, 2022