State Bank issues special forex regulations

KARACHI: The State Bank of Pakistan (SBP) on Friday issued special foreign exchange regulations for entities operating in special technology zones in Pakistan, a circular said.

The rules came after approval of the Special Technology Zones Authority Ordinance, 2020 regarding establishment of Special Technology Zones in the country.

The SBP said authorised dealers (banks) may open special foreign currency accounts of entities licenced by the Special Technology Zones Authority (STZA) under the Special Technology Zones Authority Ordinance, 2020.

The circular also said such foreign currency accounts can be fed with any proceeds, in favour of the entity, originating from abroad, including foreign borrowing, proceeds from exports of goods and services, foreign equity, earnings, profits of overseas offices, subsidiaries, associates established through funds from these accounts, without the requirement of conversion in the Pakistani rupee.

However, these accounts cannot be fed with cash foreign currency or any foreign exchange purchased from an authorised dealer or an exchange company in Pakistan for any purpose, it said.

“The funds available in such foreign currency accounts may be used by the accountholders for making all types of business-related legitimate payments abroad without any limitation and without any approval from the SBP, subject to completion of applicable documentary / reporting requirements under the relevant foreign exchange regulations.”

“In case sufficient funds are not available in the Special Foreign Currency Accounts of such entities, with any authorise d dealer in Pakistan, for making any legitimate payment abroad in foreign exchange, these entities may be allowed to make entire payment of the underlying transaction by purchasing foreign exchange from the interbank market, subject to compliance with the applicable foreign exchange regulations,” the circular said.