KARACHI: Irfan Iqbal Sheikh, President FPCCI, has urged the State Bank of Pakistan to immediately discontinue the 3 to 9 percent charge by commercial banks or authorized dealers of the SBP in foreign exchange on account of fines or lien marking on exporters’ accounts for the unfounded but deemed delay in the realization of their export proceeds.
This tantamount to discouraging exporters to bring their earnings back home to avoid unbearable financial losses, he added.
It is pertinent to note that authorized dealers are deducting 3 percent fine/ marking lien on the amount of export proceeds delayed by up to 30 days, 6 percent on realization of export proceeds delayed by more than 30-60 days and 9 percent on export payments received with a delay of more than 60 days.
He maintained that it is particularly concerning the SBP has issued a circular on April 30, 2023 to instruct commercial banks/ authorized dealers to accept and accommodate genuine cases of delay in the realization of export proceeds and exempt them from fines and lien marking; nonetheless, as usual, directives of the SBP have not been implemented in letter and spirit.
Irfan Iqbal Sheikh noted with profound concerns that it is surprising that the documentation of exporters or their foreign buyers are not given due weightage; and authorized dealers are making their ill-informed and misinterpreted decisions themselves and making undue deductions on export proceeds of the already much distressed and burgeoned exporters of Pakistan.
Suleman Chawla, SVP FPCCI said that there have been a number of genuine impediments responsible for the delayed realization of export proceeds which were totally beyond the control of exporters; namely, (i) disruptions in global commercial transactional procedures due to Russia-Ukraine war, (ii) extreme volatility in rupee-dollar parity which experienced multiple rotational rounds of unexplained depreciation and appreciation, (iii) inordinate delays in fulfillment of export orders due to delays in settlement of LCs of raw materials for the industrial production, (iv) emergence of three simultaneous foreign exchange markets, i.e. banking channel, open market and grey market.
He has demanded that all lien marking should be removed immediately and all fines should be reversed to free the hard-earned cash of the exporters; and, enable them to fulfil their export orders in hand. This is specifically important in the context of Pakistan’s prevailing conditions of unbearable cost of capital and access to finance in the backdrop of 21 percent key policy rate of the SBP and resultant hikes in interest rates of business loans from banking channels.
Copyright Business Recorder, 2023
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