In order to broaden the scope of business-to-customer (B2C) transactions through legal channel, the State Bank of Pakistan (SBP) has enhanced payment limits against freelance services in computer and information systems and other freelance services from $ 5,000 to $ 25,000 per individual per month.

Overseas Pakistanis have been allowed to remit Business to Customer (B2C) and Customer to Business (C2B) transactions through home remittance channel. However, the transaction limits were restricted up to $5000 per individual per month and industry was demanding for further increase in limits to bring more foreign exchange reserves for the country.

In order to further facilitate freelancers, SBP has decided to increase the transaction limits by five times. Now the freelance services providers in computer and information systems and other freelance services can bring up to $ 25,000 per individual per month compared to previous limits of $ 5,000 per individual per month.

According to SBP, the enhancement in limit will facilitate freelancers to route greater value of funds through a more economical and efficient channel of home remittances and help in receiving foreign exchange flows through formal banking channels in the country.

This would also enable freelancers to expand their business/ operations and engage new freelancers to join the workforce. This is expected to create employment opportunities and increase foreign exchange earnings of the country, it added.

While Export of Services has been growing in double digits, this enhancement of limits for freelancers will further accelerate growth in Export of Services in the months ahead. Export of Services posted some 10.5 percent rise in January, 2020, SBP mentioned.

According to a circular issued by SBP, Authorized Dealers (ADs) have been advised to develop risk-based standard operating procedures (SOPs) to handle all such transactions, particularly those freelance transactions which are above $ 5,000 per individual per month.

In addition, banks will conduct appropriate due diligence of the transactions and ensure that the transactions are in line with risk profile of the customer(s). As per SBP directives, banks will obtain details of the underlying services that are provided against receipt of funds in Pakistan. These details, to be obtained from the customers, will be inclusive of but not limited to the portal's name (if any) through which services acquired, counterparty are acquiring the services, nature of the services etc.

Banks also have been asked for monitoring progress and maintaining record of such transactions. While, all other instructions on the subject will remain unchanged.