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KARACHI: The State Bank of Pakistan (SBP) Tuesday night allowed the Exchange Companies import of cash US dollars against the value of their export consignments of permissible foreign currencies within five working days, through reputed cargo or security companies.

Previously, ECs were allowed to export the permissible currencies in cash but were required to bring dollars in their bank accounts. Now, with this move, ECs can also bring cash dollars through cargo or security companies.

IPSs settlement: Banks can buy dollars from interbank market: SBP

As per Chapter 5 of Exchange Companies Manual (ECM), ECs are allowed to export permissible foreign currencies other than US dollars through cargo/security companies and repatriate equivalent to US dollars in their foreign currency accounts maintained with banks in Pakistan, within five working days from the date of export of foreign currencies.

However, now exchange companies can also import dollar through the cargo or security companies.

According to the SBP, in order to facilitate customers, a new Para 4 is being inserted in Chapter 5 of ECM as under:

  1. Import of Cash US Dollars through Cargo/Security Companies

Exchange Companies, on need basis, may import cash US dollars against the value of their export consignments of permissible foreign currencies within five working days, through reputed cargo/security companies. This arrangement shall initially be in place till December 31, 2023 and will be subject to the condition that total cash US dollars imported by an exchange company during this period shall not exceed 50 percent of the value of its export consignments.

Exchange Companies shall include such arrangement in their deal with the overseas entity. The system-generated deal ticket shall also include particulars of the amount to be imported as cash US dollars, if any, out of the total export consignment, in addition to those mentioned in Para 3(iii) above.

Exchange Companies, at the time of import of US dollars cash through their cargo/security companies, shall give prior written intimation to the Director, Foreign Exchange Operations Department (FEOD), SBP Banking Services Corporation (SBP-BSC), Karachi, and copy the same to the SBP-BSC staff at SBP-Customs Joint Booth at the designated airports.

They will also provide original deal ticket of foreign bank/exchange company clearly showing the amount of cash US dollars imported, along with Annexure-8, which shall be signed and stamped by SBP-BSC officials at the booth after verification.

The foreign government’s customs and/or other export documents in original must also be submitted at SBP-Customs Joint Booth, which shall also be stamped by SBP-BSC officials. A copy of these signed and stamped documents must be kept in record by the exchange company for onsite inspection by the State Bank’s inspection team.

The import consignment shall be verified as per procedure laid down for export of foreign currencies. After verifications, the consignment shall be packed again, sealed and handed over to the cargo/security company for onward delivery to the exchange company.

Exchange Companies must ensure compliance of all relevant laws and regulations including those of the jurisdiction from where US dollars cash is being imported.

Exchange Companies shall ensure that all transactions related to import of cash shall be properly reflected in their books of accounts.

The SBP has advised ECs to bring the above instructions to the notice of all their constituents for meticulous compliance.

Copyright Business Recorder, 2023

Comments

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Fazeel Siddiqui (Overseas Pakistani) Jul 26, 2023 12:43pm
Much demanded by Malik Bostan association & neutrals, a move to fetch more FC from abroad as export proceeds allowing EC's, but surely it will neglect the AML/KYC/CFT measures leading to money laundering & non-state terror financing on eve of General elections. I expect, exporters may receive a fair exchange rate. Banks specially SBP will loose that share. Connecting this move with extension of allowing banks to buy USD from interbank for credit card settlements, PDM/PP+handlers govt plans to push the natural market exchange rate hike towards end of August. I hope PML-N Darknomic doesn't takeover the interim govt to piss of IMF with his 25 years tried cometic tricks.
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Tulukan Mairandi Jul 26, 2023 02:19pm
Only failed states institute such ludicrous controls
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