SBP takes steps aimed at timely realisation of export proceeds

KARACHI: The State Bank of Pakistan (SBP) has taken some new measures to ensure timely realization of export proceeds. Para 33 of Chapter 12(Exports) of the Foreign Exchange (FE) Manual provides the procedure for dealing with cases relating to non-realization or delay in realization of the export proceeds. A new Para 33A has been inserted after Para 33 to take fresh measurers for timely realization of export proceeds.

In order to ensure timely realization of export proceeds, SBP has decided to initiate necessary action in all those export cases where full export proceeds are not realized within prescribed time period as defined Foreign Exchange Manual.

As per Para 33A titled “Delayed Realization of Export Proceeds”, in cases where export proceeds (fully or partially) are realized after the prescribed period, the banks will adopt the new procedure at the time of conversion of export proceeds into PKR.

The Authorized Dealer (AD) will compare the weighted average buying rate published by SBP on the date of realization (i.e. Rate-A) with the same rate published by SBP on the last day of the prescribed period, after addition of the grace period, if any (i.e. Rate B).

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In case Rate-A is higher than Rate-B, the AD will convert the export proceeds at Rate-A, but pay the export proceeds at Rate-B to the exporter and will keep the difference amount in a separate account opened by them for the purpose.

A consolidated statement regarding all such differences collected by the AD will be submitted by Head/ Principal Offices of the Authorized Dealers to the Director, Foreign Exchange Operations Department (FEOD), SBP-BSC on weekly basis.

FEOD, SBP-BSC will file a complaint to Foreign Exchange Adjudication Department (FEAD), with respect to delay in realization of export proceeds.

Banks will deposit the said difference amount with SBP or refund the same to the exporter, as decided by FEAD.

However, SBP has clarified that that these instructions will not be applicable in cases of export bills/ export receivables that are discounted by the exporter to the AD. Fresh instructions will come into effect as of March 1, 2023.

Accordingly, overdue export bills will be dealt as described by the SBP. If the date of realization of export proceeds is on or before February 28, 2023 and date export proceeds became overdue prior to February 28, 2023 than the date of realization, will be applied, for payment to exporter.

In case if the date of realization of export proceeds is on or after March 1, 2023 and date export proceeds became overdue on or before February 28, 2023 than the date of realization or March 1, 2023, whichever is lower, will be applied, for payment to exporter.

If the date of realization of export proceeds is after March 1, 2023 and date export proceeds became overdue after March 1, 2023 than the date of realization or date on which export proceeds become overdue, whichever is lower, will be applied, for payment to exporter.

SBP has advised the Authorized Dealers to bring the instructions to the knowledge of all their constituents and ensure meticulous compliance of the above instructions.

Copyright Business Recorder, 2023