Realisation of export proceeds: Towel manufacturers criticise SBP circular

KARACHI: Syed Usman Ali, Senior Vice Chairman of Towel Manufacturers Association of Pakistan has expressed deep concern over the issuance of SBP FE Circular No 02 of 2023 wherein the exporters are again left facing a new difficult situation.

We would like to clarify the misconception in the government circles that the exporters willingly delay their remittances from abroad in order to gain the benefits of the currency devaluation which is absolutely wrong.

It must be noted that the exporters also have liabilities to pay against their purchases which they have to pay in a timely manner in order to continue their business smoothly.

The timely remittance ensures that their cash flow runs smoothly so they can continue their production and exports. Delays in the remittances cause supply chain issues which is the most difficult situation to deal with for the exporters.

He further added that delayed remittance can be caused by various factors generating from the importer’s side only i.e. slow sales, delayed deliveries, delayed in vessel arrivals, slowdown in remittance from the final customers, are some of the many factors due to which the importer delays the payments and none of these factors can be rectified by the exporters.

Even in cases on LCs, many times there are minor discrepancies which are identified by the importer’s bank at the time of the payment. It takes a few days for the exporter to clear these discrepancies, thus causing delay in the payment.

Remittances against CAD shipments can be delayed due to the late vessel arrivals, port congestion, delay from the importer in releasing the cargo, amongst many other factors. Again there is nothing the exporter can do in order to resolve these issues.

If the exporters fail to repatriate their export proceeds within the specific time period then the SBP Foreign Exchange Adjudication Department (FEAD) has authorized U/s 12 (1) of FER, 1947 Acts read with Foreign Exchange Rules 1952 & notification No FE 3/2001-SBP dated 28-09-2001 which is punishable U/s 238 (4) of the said Act.

Here we raise a point as to why these rules are again notified in FE Circular No 01 of 2023 dated 13th February 2023 and FE Circular No 02 of 2023 dated 3tst March 2023. Our institutions should provide facilities and their full support for the growth of exporters rather they create hurdles for the exporters. Every sensible person knows that our prosperity is strongly linked with the growth of exports.

We are requesting to the SBP to please withdraw the SBP FE Circular No 02 of 2023 immediately to provide relief to the exporters. The exporters of Pakistan are already facing a very difficult situation due to the global economic slow down, continuous increase in cost of doing business due to hyper inflation in the country, the Ukraine war etc.

The State bank should try to facilitate exporter by easing their restrictions so Pakistan’s sliding exports can get back on the growth trajectory. The SBP FE Circular No 02 of 2023 only causes more difficulties for the genuine exporters of this country.

The Senior Vice Chairman of TMA Syed Usman Ali urged the SBP to call a productive meeting of all Exporters Oriented Associations to discuss the SBP FE Circular No 02 of 2023 and formulate a comprehensive productive strategy for the growth of exports which is the backbone of our economy.

Copyright Business Recorder, 2023