AIRLINK 63.78 Increased By ▲ 1.58 (2.54%)
BOP 6.14 Decreased By ▼ -0.09 (-1.44%)
CNERGY 4.87 Decreased By ▼ -0.12 (-2.4%)
DFML 14.94 Increased By ▲ 0.04 (0.27%)
DGKC 66.99 Decreased By ▼ -2.00 (-2.9%)
FCCL 17.39 Decreased By ▼ -0.34 (-1.92%)
FFBL 24.93 Increased By ▲ 0.33 (1.34%)
FFL 9.18 Decreased By ▼ -0.03 (-0.33%)
GGL 10.23 Increased By ▲ 0.33 (3.33%)
HBL 108.24 Decreased By ▼ -0.26 (-0.24%)
HUBC 116.75 Increased By ▲ 0.25 (0.21%)
HUMNL 6.63 Decreased By ▼ -0.07 (-1.04%)
KEL 4.41 Decreased By ▼ -0.05 (-1.12%)
KOSM 4.65 Decreased By ▼ -0.07 (-1.48%)
MLCF 35.87 Decreased By ▼ -1.03 (-2.79%)
OGDC 123.07 Decreased By ▼ -0.23 (-0.19%)
PAEL 22.94 Increased By ▲ 0.50 (2.23%)
PIAA 23.89 Increased By ▲ 1.67 (7.52%)
PIBTL 5.77 Increased By ▲ 0.02 (0.35%)
PPL 111.09 Increased By ▲ 0.19 (0.17%)
PRL 27.60 Increased By ▲ 0.03 (0.11%)
PTC 15.25 Increased By ▲ 1.06 (7.47%)
SEARL 53.02 Decreased By ▼ -0.23 (-0.43%)
SNGP 63.34 Decreased By ▼ -0.41 (-0.64%)
SSGC 10.83 Decreased By ▼ -0.17 (-1.55%)
TELE 9.23 Increased By ▲ 0.28 (3.13%)
TPLP 10.97 Increased By ▲ 0.24 (2.24%)
TRG 71.43 Increased By ▲ 1.13 (1.61%)
UNITY 25.00 Increased By ▲ 0.80 (3.31%)
WTL 1.38 Increased By ▲ 0.02 (1.47%)
BR100 6,751 Increased By 52.9 (0.79%)
BR30 22,646 Increased By 28.2 (0.12%)
KSE100 65,503 Increased By 612.1 (0.94%)
KSE30 21,721 Increased By 185.1 (0.86%)

KARACHI: Recent news circulating in some sections of the media that certain payments to Google are stuck at the State Bank of Pakistan, are baseless and misleading. SBP strongly refutes all such assertions.

The fact is that in order to facilitate the domestic entities, SBP specified certain Information Technology (IT) related services, which such entities can acquire from abroad for their own use and make foreign exchange payments there against up to $100,000 per invoice.

Such services include, Satellite Transponder, International Bandwidth/ Internet/ Private Line Services, Software License/ Maintenance/ Support, and service to use electronic media and databases. Entities desirous of utilizing this option designate a bank, which is approved by SBP one time. Subsequently, after designation, such payments can be processed through the designated bank, without any further regulatory approval.

However, during recent off-site reviews, it was observed that in addition to utilizing the aforesaid mechanism to remit funds for IT related services for their own use, Telcos were remitting bulk of the funds for video gaming, entertainment content, etc. purchased by their customers using airtime, under Direct Carrier Billing (DCB). DCB is, in general, an online mobile payment method, which allows users to make purchases by charging payments to their mobile phone carrier bill.

Suspension of DCB payments to Google Play: users, telecom companies at receiving end

The Telcos were allowing their customers to purchase above mentioned products through airtime and then remitting funds abroad reflecting such transactions as payments for acquisition of IT related services.

Thus, in effect the Telcos were acting as intermediaries/payment aggregators by facilitating acquisition of services by their subscribers. Therefore, in view of the violation of foreign exchange regulations, SBP revoked the designation of banks of Telcos for such payments. However, to facilitate their legitimate IT related payments, Telcos have been advised through their banks to resubmit their requests.

If any entity, including a telco, intends to operate as an intermediary/payment aggregator and such arrangement involves outflow of foreign exchange, it has to approach SBP, separately through its bank, for seeking special permission for providing such services under the Foreign Exchange Regulation Act, 1947.

Copyright Business Recorder, 2022

Comments

Comments are closed.