Earlier on October 6, the federal government issued Foreign Currency Accounts Rules, 2020 under the provisions of Protection of Economic Reforms Act (PERA), 1992, in a bid to stop money laundering. The State Bank of Pakistan (SBP) on Sunday issued both a clarification and a lengthy ‘frequently asked questions (FAQs)’, in response to the recently announced federal rules on foreign currency accounts that have sparked concern.
According to the document, a foreign currency account of an individual may be credited with the remittances received from abroad through a banking channel: except for payment for goods exported from Pakistan, payment for services rendered in or from Pakistan, proceeds of securities issued or sold to non-residents, and any foreign exchange borrowed from abroad under any general or special permission of the State Bank, provided that the SBP may issue any general or special permission for credit the account.
Yet on Sunday, the central bank emphatically stated, “There has been no change in the general or special permissions given by the State Bank to individuals under the foreign exchange regulations.”
In its clarification, the State Bank said that according to paragraph iv, Chapter 6 of the Foreign Exchange Manual, foreign currency accounts can be fed by remittances received from abroad, travellers’ cheques issued outside Pakistan and encashment of securities issued by the government.
A foreign currency account of a citizen of Pakistan resident in Pakistan can also be fed with cash foreign currency only if the account holder is a filer as defined in Income Tax Ordinance, 2001.
Originally published by Profit