CHAPTER 6

PRIVATE FOREIGN CURRENCY ACCOUNTS

1. Opening of Foreign Currency Accounts with Banks in Pakistan.

2. Local US Dollar Instruments Collection and Settlement System.

3 Different Schemes for Foreign Currency Accounts.

4. State Bank’s Forward Cover Scheme.

5. Acceptance of Deposits from foreign banks operating abroad and overseas branches.

6. Payment of subsidy on account of interest differential.

7. F.E. 25 Scheme.

8. Special Foreign Currency Accounts of Private Power Projects.

8A. Foreign Currency Value Account (FCVA)

8B. Foreign Currency Business Value Account (FCBVA)

9. Special permission for Foreign Currency Accounts.

9A. Special Foreign Currency Accounts of Entities in Special Technology Zones (STZs)

10. Reporting of receipts into and payments from foreign currency accounts.

11. Reporting of local disbursements from foreign currency accounts.

12. Reporting of interest on foreign currency accounts.

12A. Maintenance of record of foreign currency transactions and reporting to the State Bank.
13. Payments by Foreign Nationals in Foreign Currencies.

14. Foreign Exchange received by Residents in Pakistan.

1
 CHAPTER 6

PRIVATE FOREIGN CURRENCY ACCOUNTS

1. Opening of Foreign Currency Accounts with Banks in Pakistan.

(i) Authorized Dealers may, without prior approval of the State Bank, open with them
foreign currency accounts of the following: -

a) Pakistan Nationals resident in or outside Pakistan, including those having a dual

nationality.

b) All foreign nationals, whether residing abroad or in Pakistan.

c) Joint Account in the names of residents and non-residents.

d) All diplomatic missions accredited to Pakistan, and their Diplomatic Officers.

e) All International Organizations in Pakistan.

f) Firms and companies established/incorporated and functioning in Pakistan,

including those having foreign share-holdings except as outlined in sub-para (v)
below.

g) Charitable Trusts, Foundations etc. which are exempted from income tax.

h) Branches of foreign firms and companies in Pakistan.

i) Non-resident Exchange Companies even if owned by a bank or financial

institution.

j) All foreign firms/corporations, other than banks and financial institutions owned by
Banks, incorporated and operating abroad provided these are owned by persons
who are otherwise eligible to open foreign currency accounts.

k) Exchange Companies licensed by the State Bank in terms of FE Circular No. 9

dated the 30th July, 2002.

However, the facility is not available to airlines and shipping companies operating
in/through Pakistan or collecting passage and freight in Pakistan and the investment banks,
leasing companies and modaraba companies including those which have been granted licences
to deal in foreign exchange.

(ii) Opening of foreign currency account covered by sub-para (i) is subject to the condition
that these are not fed with:

a) any foreign exchange borrowed under any general or specific permission given by
the State Bank, unless otherwise permitted;
b) any payment for goods exported from Pakistan;
c) proceeds of securities issued or sold to non-residents;
d) any payment received for services rendered in or from Pakistan;

2
 e) earnings or profits of the overseas offices or branches of Pakistani firms and
companies including banks, investment of resident Pakistanis abroad; and
f) any foreign exchange purchased from an Authorized Dealer or money changer
or exchange company1 in Pakistan for any purpose.
(iii) Corporate Bodies/Legal entities cannot generate funds from the Kerb market for
deposit in their foreign currency accounts.

(iv) Foreign currency accounts can be fed by remittances received from abroad,
travellers cheques issued outside Pakistan (whether in the name of account holder or in the name
of any other person) and foreign exchange generated by encashment of securities issued by the
Government of Pakistan. A foreign currency account of a citizen of Pakistan resident in Pakistan
can also be fed with cash foreign currency only if the (resident)2 account holder is a filer as
defined in Income Tax Ordinance, 2001.

(v) Opening by firms/companies of foreign currency accounts, which are to be fed

through the funds of foreign equity/foreign currency loans raised for establishment of industrial
and other projects and by contractors who receive payments in foreign exchange from the
employers, would be as per procedure laid down in paragraph 9 of this chapter.

(vi) These accounts are free from all Foreign Exchange restrictions. In other words,
account holders have full freedom to operate on their accounts to the extent of the balance
available in the accounts either for local payments in Rupees or for remittance to any country
and for any purpose or for withdrawals in the shape of foreign currency notes and travellers
cheques. However, personal foreign currency accounts of any nature should not be used for
commercial and business purposes. Further, in case of any deposit of foreign currency notes of
more than USD 10,000 (or equivalent in other currencies) in a single day, the account holder
shall be required to present the original receipt of acquisition. The Authorized Dealer shall keep
on record the copy of such receipt. A restriction was placed on withdrawal in foreign currency
from some categories of foreign currency accounts existing as on 28th May, 1998. The
instructions issued vide FE Circular No.12 of 1998, as amended from time to time, would
continue to be operative, till the restrictions are lifted. Holders of such accounts are, however,
free to transfer their accounts from one Authorized Dealer to another.

(vii) Accounts can be maintained and payments (excluding local payments) made in any
currency of choice of the account holder. Credit Card facility can be obtained by the account
holders to the extent of the balances held in their respective accounts, for utilization in and
outside Pakistan provided settlement of the bills in respect of expenditure within the country is
made in Rupees only and the relevant foreign currency amount is taken by the Authorized
Dealers in their daily exchange position.

(viii) Authorized Dealers can mark lien on the foreign currency accounts in respect of
banking facilities like credit cards, bank guarantees and loan/credit etc. availed of by the account
holders in and outside Pakistan. The aggregate amount of the facilities availed of in and outside
Pakistan should not, however, exceed the balance in the respective accounts at any point of time
and the regulations on credit should be strictly adhered to.

1
Amendment in PERA 1992 vide Gazette Notification dated May 24, 2018 [Section 7 (2)(b)]
2
EPD Circular Letter No. 07 of 2019 (Para 3)
3
 (ix) Head/Principal Offices of Authorized Dealers will send to the State Bank such
returns in respect of these foreign currency accounts as may be prescribed from time to time.

2. Local US Dollar Instruments Collection and Settlement System.

With the liberalization of the foreign currency regime in the country, and to facilitate
operations for maintaining Foreign Currency Accounts under FE-25, Local US Dollar
Instruments Collection and Settlement System has been introduced in Pakistan with effect from
March 11, 2004.

Scope and Salient Features of Local US Dollar Instruments Collection and Settlement
System are given in Appendix VI-2:

3. Different Schemes for Foreign Currency Accounts.

Foreign currency accounts covered by paragraph (1) could be opened by the Authorized
Dealers upto 28th May, 1998 under the State Bank’s forward cover scheme, and thereafter under
the rules introduced vide FE Circular No.25 of June 20, 1998. Separate ledgers will be
maintained by the Authorized Dealers for these foreign currency accounts. In addition, Special
Foreign Currency Accounts can be opened with the specific or general permission of the State
Bank.

4. State Bank’s Forward Cover Scheme.

(i) Under the State Bank’s forward cover scheme, the Authorized Dealers will fix their
own rates of interest for Term Deposits of 3 months, 6 months, 12 months, 2 years and 3 years
provided they do not exceed the average Bid rates provided by British Banker’s Association
(BBA) for the concerned currencies at the close of business on the previous working day plus
the margins prescribed by the State Bank from time to time. The maximum rates for payment of
interest, including the margins allowed by the State Bank, are published daily by the Foreign
Exchange Rates Committee.

(ii) As regards foreign currency deposits of less than 3 months including Call Deposits,
Savings Bank, Special Notice etc. accounts, Authorized Dealers shall pay interest on the basis of
return last allowed on similar Rupee PLS Accounts provided the rate at which interest is paid
does not exceed the interest rate applicable to 3 months Term Deposits of the relevant foreign
currency.

(iii) Authorized Dealers shall sell all the deposits in foreign currency accounts to the
State Bank in multiples of US$ 1,000/-, £ Stg.1,000/-, Euro 1,000/- and J. Yen 250,000/-. State
Bank shall cover exchange risk of all such deposits as well as interest accruing thereon at the
option of the Authorized Dealers, subject to payment of fee at the time of taking the forward
cover at the rate(s) prescribed by the State Bank from time to time. Fee is payable on the full
amount of forward cover obtained notwithstanding whether it is in respect of the amounts of
deposit or for both the amount of deposit and interest. In case of premature withdrawal of
deposit, fee for the unexpired period is refundable.

5. Acceptance of Deposits from foreign banks operating abroad and overseas branches.

As an exception to the rules set out in paragraph 1(i) (j) of this chapter, Authorized
Dealers can accept foreign currency deposits from their overseas branches and foreign banks
operating abroad, including financial institutions owned by them, provided the amount and
period of maturity of such deposits is not less than those prescribed from time to time. Interest

4
on these foreign currency deposits can be paid by the Authorized Dealers annually, six monthly
or quarterly in accordance with the option exercised by the depositor in writing at the time of
placement of deposits. Interest can be paid at the rate not exceeding the prescribed margins over
Bid rate for the respective period as provided by the BBA at the close of business on the
working day immediately preceding the date of deposit as published by the Foreign Exchange
Rates Committee.

6. Payment of subsidy on account of interest differential.

Where the interest paid on foreign currency Term Deposits of 3, 6 and 12 months on the
basis of BBA’s bid rates as prescribed in the earlier paragraphs exceeds the return last allowed
on similar Rupee PLS Accounts, State Bank shall reimburse the amount of differential on
account of the excess to the Authorized Dealers. For the purpose of claiming reimbursement of
the differential, Authorized Dealers should furnish to the Chief Managers' Offices of the SBP-
Banking Services Corporation, details of individual foreign currency Term Deposits in the
prescribed form (Appendix V-2) while surrendering the amount of foreign exchange to the State
Bank. This statement will be submitted in triplicate and bear running serial number. After the
interest has been paid, claim for payment of interest differential will be lodged by the
Authorized Dealers with the Chief Managers' Offices of the SBP-Banking Services Corporation
in the form given at Appendix V-3.

7. F.E. 25 Scheme.

(i) The amounts of foreign currency deposits accepted outside State Bank’s forward cover
scheme i.e. under F.E. Circular No. 25 of 1998, are not required to be surrendered to the State
Bank and the Bank will not provide any forward cover for the same. The Authorized Dealers
accepting such deposits are free to lend, invest and place on deposit such funds in Pakistan and
abroad subject to the observance of regulations prescribed under the Banking Companies
Ordinance.

(ii) Authorized Dealers are free to decide the rate of return offered on such deposits.

(iii) Authorized Dealers may open foreign currency accounts and extend trade loans under FE-
25 Scheme in US Dollar (USD), Pound Sterling (GBP), Euro (EUR), Japanese Yen (JPY),
Canadian Dollar (CAD), UAE Dirham (AED), Saudi Riyal (SAR), Chinese Yuan (CNY), Swiss
Franc (CHF) and Turkish Lira (TRY).

(iv) Authorized Dealers may use the interbank placements and interbank SWAPs or any other
source of foreign currency liquidity that is permitted under SBP Rules/Regulations to extend
trade loans in the above foreign currencies. However, currency of the trade loan should be the
same as that of the underlying LC/ Firm Trade Contract.

(v) In terms of BSD Circular No. 18 dated the 31st March, 2001, Banks have been allowed to
use/invest their deposits mobilized under FE 25 for financing of Import/Exports. The
Authorized Dealers must follow the guidelines on the subject which are available at Appendix
VI-3.

8. Special Foreign Currency Accounts of Private Power Projects.

(i) Authorized Dealers may open the following Special Foreign Currency Accounts/Off-
shore Foreign Currency Accounts of private power projects in Pakistan as per the
Implementation Agreements (IAs) entered into with Private Power and Infrastructure Board
(PPIB), Government of Pakistan. These accounts will be maintained during the construction

5
and operation of the projects for the following purposes subject to the conditions mentioned
against each and the balances held in such accounts will be retained by the Authorized Dealers
in addition to their Exposure Limits and will also not be required to be reported under F.E. 25
Scheme:

a) Special Foreign Currency Account in or outside Pakistan.

This will be maintained for deposit of foreign equity and foreign currency loan under
the Loan Agreement registered with the State Bank. The amounts available therein will be
utilized for the purposes of the project as provided for in the IAs.

b) Special Foreign Currency Insurance Account.

This will be maintained for depositing amounts required for payment of
insurance/reinsurance premia and for receiving insurance/reinsurance claims against covers
taken in foreign currency outside Pakistan with the approval of the Controller of Insurance
or with State Bank’s approval from an insurer in Pakistan, provided that amounts not
required for meeting expenditure in foreign exchange will be repatriated to Pakistan and
converted into rupees.

c) Off-Shore Foreign Currency Control Account.

This will be maintained subject to the condition that PPIB/Independent Engineer would
determine for each project the portion of revenues required to meet the foreign currency cost
for operating the project.

d) Off-Shore Foreign Currency Operating Account.

This will be maintained subject to the condition that O&M expenses to be

remitted/deposited periodically to this account will be apportioned by the PPIB/Independent
Engineer.

e) Off-Shore Disputed Payment Escrow Account.

This will be maintained subject to the condition that the balance will be remitted to
Pakistan once the dispute is over.

f) Off-Shore Foreign Currency Debt Payment Account.

This will be maintained for depositing the amount required for Debt Service.

g) Off-Shore Debt Service Reserve Account.

This will be maintained subject to the condition that this account will be liquidated
simultaneously with the retirement of debt and the maximum balance in this account would
not exceed the next 12 months Debt Service Payment (both Principal and Interest).

h) Off-Shore Foreign Currency Maintenance Reserve Account.

This will be opened and maintained subject to the condition that this amount will be
liquidated simultaneously with the life of the agreement and that this account will hold the
maximum of US$ 3 million during the term of Power Purchase Agreement.

6
 i) Off-Shore Foreign Currency Dividend Account.

This will be used for receiving remittance of dividends as and when declared and paid
by the company.

(ii) A monthly statement in the form prescribed at Appendix V-4 will be submitted
electronically to the Statistics & Data Warehouse Department of State Bank at
fca.stat@sbp.org.pk by 5th of the following month for each account separately. However,
certificates from the companies’ auditors to the effect that the payments made from the accounts
are strictly in accordance with or covered under the Implementation Agreement, Power Purchase
Agreement or other agreements, if any, approved by the Government will be submitted to
Exchange Policy Department of the State Bank.

(iii) Interest earned on balances held in these accounts will be repatriated to Pakistan.

(iv) There will be nil balance in the Main Control Account and all other accounts after the
expiry of the relevant Agreement Period.

(v) Any earnings from dealing in currency/exchange should also be repatriated to Pakistan.

(vi) Authorized Dealers will ensure that Income Tax, wherever due on payments made
through the accounts, is duly deducted and paid to the Income Tax Authorities.

(vii) Authorized Dealers may also open Special Foreign Currency Accounts of the foreign
EPC (Engineering, Procurement and Construction) and O&M (Operation and Maintenance)
contractors of the Power Projects operating in Pakistan with the approval of the Government for
receipt of foreign currency amounts under the contracts awarded to them by the Power Projects
and its utilization in accordance with the EPC/O&M contracts.

8A. Foreign Currency Value Account (FCVA)3

(i) Authorized Dealers may open ‘Foreign Currency Value Account (FCVA)’ of the following:

(a) Individual non-resident Pakistani and non-resident holding Pakistan Origin Card
(POC)4;
(b) A resident individual Pakistani who has duly declared assets held abroad, as per wealth
statement declared in latest tax return with Federal Board of Revenue (FBR).

Operations of Foreign Currency Value Account shall be governed by the regulations set out below:

(ii) General Operations

(a) Authorized dealer shall clearly mark the account as resident or non-resident at
the time of account opening.
(b) Authorized dealer shall allow operations in the account through the digital
channels e.g. internet/mobile banking, ATM/ Debit cards. The ADs may also
issue cheque book to the account holder, if required.
(c) Authorized dealer may issue supplementary ATM/Debit cards as per applicable
laws /regulations.
(d) The resident individual desirous to open FCVA shall have to provide the
declaration of his/her assets held abroad, including latest wealth tax statement
filed with FBR.

3
FE Circular No. 02 of 2020
4
EPD Circular Letter No. 23 of 2020
7
 (e) Authorized dealer are encouraged to provide online real time convertibility from
FCY to PKR based on the request made by the account holder digitally for
eligible debits from the account. For the sake of transparency, ADs shall
indicate the exchange rate applicable to the transaction.
(f) Authorized dealer may allow non-resident Pakistanis/ non-residents holding
POC5 to open the account jointly with other residents/non-residents, as per
applicable laws/banking practices. These accounts should, however, be treated
as non-resident accounts. However, a resident Pakistani, having foreign assets
declared with FBR, may be allowed to open the account jointly with a resident
only.
(g) In case the account becomes dormant due to non-operation, ADs shall devise a
mechanism, aligned with applicable regulations, to reactivate the account
digitally, in case of non-resident account. However, for resident FCVA, the ADs
may reactivate the account digitally or otherwise in compliance with the
applicable regulations and their own policy.
(h) Authorized dealer will ensure ongoing monitoring of these accounts to mitigate
ML/FT risk.
(i) ADs shall be responsible to report inward remittance transactions, except for
family maintenance and exports, exceeding USD 10,000/- on Form “R” to
SBP. However, for the purpose of filling in Form ‘R’ the bank receiving
remittances in FCVA exceeding USD 10,000/- or equivalent thereof, may
digitally obtain the information, from the customer or remitting bank, if not
already available in the transaction detail6.

(iii) Credits to the Foreign Currency Value Account.

(a) Remittances received from abroad through banking channels.
(b) Transfer of funds from his/her own NRP Rupee Value Account (NRVA) with the
same AD.
(c) Profit/interest on the permissible investments made from the account.
(d) Dis-investment proceeds from the permissible investments made from the account.
(e) Profit and premature/ maturity proceeds of Pakistan Banao Certificates (PBCs) into
the PBC holder’s own FCVA7.
(f) Reversal of any incorrect debit in the account.

(iv) Debits to the Foreign Currency Value Account.

(a) Investment in permissible securities provided that the relevant laws/regulations permit such
investment, as under:
(i) Government of Pakistan’s registered debt securities denominated in FCY only.
(ii) Term deposit/remunerative product scheme, denominated in FCY, of the same AD.

The funds for the above investments shall be transferred by the ADs only in the eligible
products, through the instructions received from the account holder in this behalf.

(b) Transfer of funds to account holder’s own NRP Rupee Value Account (NRVA) with the
same AD.
(c) Transfer to other FCY, PKR account and non-resident Rupee account – non-repatriable with
any bank in Pakistan.
(d) Remittances and payments outside Pakistan to the extent of balances available in the
account, without any prior approval from the bank or the State Bank.
(e) Cash withdrawal in foreign currency or in equivalent local currency.

5
EPD Circular Letter No. 23 of 2020
6
EPD Circular Letter No. 23 of 2020
7
EPD Circular Letter No. 13 of 2021
8
 (f) Any payment in PKR to any person resident in Pakistan. However, any amount so paid shall
not be allowed to be credited back into the account.
(g) Reversal of any incorrect /wrong credit entry.

(v) Authorized dealer shall submit a consolidated monthly statement of transaction(s) executed from
FCVA on Appendix VI-3A (placed at end of this chapter) at FCVA@sbp.org.pk through their
head/principal office by 7th of the ensuing month for each reference month.

(vi) Authorized dealer are encouraged to make necessary arrangement in their systems to facilitate
non-resident Pakistanis/ non-residents holding POC, in opening and operating FCVA remotely
through digital channels.

8B. Foreign Currency Business Value Account (FCBVA)8

(i) Authorized Dealers may open ‘Foreign Currency Business Value Account (FCBVA)’ of
the legal entities incorporated or registered abroad and majority (51% or more) owned and/or
controlled by the non-resident Pakistanis and/or non-resident POC holders. These entities could be
Companies, Associations, Foundations, Limited liability partnerships (LLPs), Societies, Trusts,
Waqfs and /or other similar legal arrangement. However, this will not include sole proprietorships
or unregistered partnerships. Operations of the Foreign Currency Business Value Account
(FCBVA) shall be governed by the regulations mentioned below:

(ii) General Operations

a) Authorized dealer may allow operations in FCBVA through electronic channels
besides conventional modes in practice. Authorized dealer may also issue cheque
book, if required by the authorized account operators.
b) Authorized dealer are required to provide online real time convertibility from
FCY to PKR based on the request made by the authorized account operator
electronically for the eligible debits from the account. For the sake of
transparency, the Authorized dealer shall indicate the exchange rate applicable to
the transaction.
c) In case FCBVA becomes dormant due to non-operation, ADs shall devise a
mechanism, aligned with applicable regulations, to reactivate the account
digitally.
d) Authorized dealer will ensure regular monitoring of FCBVAs to mitigate ML/TF
risks.

(iii) Credits to the Foreign Currency Business Value Account

a) Remittances received from abroad through banking channels.
b) Transfer of funds from its own NRP Rupee Business Value Account (NRBVA)
maintained in PKR with same authorized dealer.
c) Profit, mark-up, return or proceeds of sale or maturity of permissible investments
made from FCBVA.
d) Reversal of any erroneous debit from FCBVA.

(iv) Debits from the Foreign Currency Business Value Account

(a) Investment in permissible securities, provided that the relevant laws/regulations permit
such investment, as under:
(b) Only FCY denominated Government of Pakistan’s registered debt securities.
i. FCY denominated term deposit/remunerative product scheme of same

8
FE Circular No. 04 of 2022
9
 authorized dealer.
ii. The funds for the above investments shall be transferred by the authorized
dealer only in the eligible products, through the instructions received from the
authorized account operator in this behalf.
(c) Transfer of funds to its own NRBVA maintained in PKR with the same AD.
(d) Transfer to any other FCY or PKR account.
(e) Remittance or payments to the extent of balance available therein, without any prior
approval of the State Bank of Pakistan.
f) Any payment in PKR in Pakistan. However, any amount so paid shall not be
allowed to be credited back into the account, except as otherwise permissible under
the regulations.
g) Reversal of any erroneous credit entry.

9. Special permission for Foreign Currency Accounts.

(i) Foreign Oil/Mineral exploration companies and foreign contractors and their foreign
sub-contractors may be allowed by the Authorized Dealers to open foreign currency accounts
under the Scheme described in paragraph 7 or Special Foreign Currency Accounts subject to the
condition that they will meet all their expenditure in Pakistan including salaries of foreign
nationals/non-residents in Pak Rupees only, out of rupee payments, if any, received by them in
terms of their contracts/by converting in the inter-bank market funds received from their Head
Offices/by converting funds from their foreign currency accounts in the inter-bank market.

(ii) (a) Firms and companies raising foreign equity and foreign currency loan may be
allowed by Authorized Dealers to open special foreign currency account for receiving
and retaining the foreign funds on submission of information about the source of
foreign funding and the amount required to be retained in foreign currency. The funds
available in such foreign currency accounts can be used by the account holders for
making only those types of payments which are otherwise permissible in terms of the
instructions laid down in this Manual (e.g. imports, consultancy) and which are related
to the business of the account holder. Any amount not so used will be required to be
converted into rupees in the inter-bank market and no withdrawal will be allowed in the
shape of foreign currency notes.

(b) The concerned Authorized Dealer will be required to submit monthly statements in the prescribed
proforma (Appendix V-4) electronically to the Statistics & Data Warehouse Department of the State
Bank at fca.stat@sbp.org.pk by 5th of the following month for each account separately. However, the
related import documents, invoices, agreements etc. will be submitted to Exchange Policy Department
of the State Bank.

9A. Special Foreign Currency Accounts of Entities in Special Technology Zones (STZs)9

(i) Authorized Dealers may open Special Foreign Currency Accounts of entities licensed by
Special Technology Zones Authority (STZA) under the Special Technology Zones
Authority Act, 2021.
(ii) Such foreign currency accounts can be fed with any proceeds, in favor 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 into
PKR. However, these accounts cannot be fed with cash foreign currency or any foreign
exchange purchased from an authorized dealer or an Exchange Company in Pakistan for

9
FE Circular No. 08 of 2020
10
 any purpose.
(iii) Funds available in such foreign currency accounts may be used by the account holders for
making all types of business related legitimate payments abroad without any limitation and
without any approval from SBP, subject to completion of applicable
documentary/reporting requirements under relevant foreign exchange regulations.
(iv) In case sufficient funds are not available in Special Foreign Currency Account of such
entities, with any authorized 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 interbank market, subject to
compliance with applicable foreign exchange regulations. However, ADs shall obtain an
undertaking from such entities to the above effect.
(v) In case any local payment is required to be made from Special Foreign Currency Accounts
by such entities, the same shall be allowed by authorized dealers after converting the funds,
available in such accounts, into PKR through inter-bank market. However, no cash
withdrawal will be allowed in shape of FCY notes.

10. Reporting of receipts into and payments from foreign currency accounts.

Receipt of foreign currency amounts for credit to the foreign currency accounts should
be reported by the Authorized Dealers as "Purchase" on Schedule 'J' under Code 9532, 9533,
9534, 9535, 9536 in the case of accounts opened in terms of paragraph 1 and under Code 9648,
9649, 9650, 9651, 965410, 9698 and 9699 in respect of accounts opened under special
permission granted by the State Bank in accordance with the provisions of paragraphs 8 & 9
ibid. Similarly payments out of the foreign currency accounts should be reported by the
Authorized Dealers as "Sale" on Schedule E-4 under Code 1522, 1523, 1524, 1525, 1526 in the
former case and under Code 1648, 1649, 1650, 1651, 165411, 1530 and 1699 in the later case.
Transactions in accounts covered by paragraph7 are also required to be reported in the summary
statements.

11. Reporting of local disbursements from foreign currency accounts.

Authorized Dealers should report the payments in rupees from foreign currency
accounts as "Sale" on Schedule E-4 under Code 1522, 1523, 1524, 1525, 1526 in case of
account opened under Para 1 above and on 153012 in case of account opened under Para 8 and 9
above . The Rupee receipts should simultaneously be reported as "Purchase" on relevant
schedules under a code appropriate to the purpose of the receipt.

12. Reporting of interest on foreign currency accounts.

Interest paid by Authorized Dealers on Foreign Currency Accounts should be reported

as "Sale" on Schedule E-4 of the monthly foreign exchange returns under Code 1431 for
residents and under code 143213 for non-residents. The receipts should simultaneously be
reported as "Deposits" in FCA on relevant schedules under an appropriate code.

12A. Maintenance of record of foreign currency transactions and reporting to the State
Bank.

Authorized Dealers are required to maintain consolidated data/record of transactions routed

through foreign currency accounts of individuals/entities at their head offices on monthly basis,

10
Code List No. 05 enclosed under S&DWD Letter No. DS.ITS/GEN/2020-009454/20 dated August 24, 2020
11
Code List No. 07 enclosed under S&DWD Letter No. DS.ITS/GEN/2020-009454/20 dated August 24, 2020
12
S&DWD Letter No. DS.DS/ITSD/GEN/2017-015586/17 dated July 03, 2017
13
Code List No. 07 enclosed under S&DWD Letter No. DS.ITS/GEN/2020-009454/20 dated August 24, 2020
11
 in addition to the data/record already being maintained, in the following manner:

i. Data of those personal foreign currency accounts maintained by individuals where

aggregate amount exceeding US$ 10,000 or its equivalent in other foreign currencies is
deposited in, withdrawn from or remitted out from the account during the month as per
the format at Appendix VI- 4.

ii. Data of foreign currency accounts maintained by entities where aggregate amount
exceeding US$ 25,000 or its equivalent in other foreign currencies is deposited in,
withdrawn from or remitted out from the account during the month as per format at
Appendix VI- 4.

Further, Authorized Dealers should report data related to foreign currency accounts (deposits,
utilization and borrowings, etc.) and that reported through various statements to the Director,
Statistics & DWH Department at fca.stat@sbp.org.pk electronically through the Data File
Structure (DFS) available at Data Warehouse Knowledge Centre under Balance of Payment
Tab as per the reporting format14 at Appendix VI-5 latest by 7th of the following month for
each reference month.

In case of non-reporting, incomplete or mis-reporting by an authorized dealer, appropriate

regulatory action shall be taken against the bank under the relevant rules and regulations.15

13. Payments by Foreign Nationals in Foreign Currencies.

Payments in foreign currency by foreign nationals residing in Pakistan to or on behalf of

residents of Pakistan whether Pakistanis or foreign nationals are prohibited. Foreign nationals
should not, therefore, directly or indirectly, make foreign currency available to the residents or
to other persons on their behalf against payment in Rupees. Such payments are prohibited even
from their foreign currency accounts which they are permitted to maintain and operate from
Pakistan.

14. Foreign Exchange received by Residents in Pakistan.

Payments in foreign exchange received by an Authorized Dealer on behalf of a resident

in Pakistan must not be retained in foreign exchange but must be converted into Rupees unless
the State Bank has given general or special permission to the beneficiary to retain the foreign
exchange received by him.

14
EPD Circular Letter No. 06 of 2018 & S&DWD Circular No. DS. BP/006984/2022 dated June 27, 2022
15
FE Circular No. 01 of 2017
12
 Appendix VI-2

Local US Dollar Instruments Collection and Settlement System

(i) Instruments: All financial instruments (cheques, drafts etc.) denominated in US$
drawn on bank branches (in cities as appear in the coverage list below) in
Pakistan will be acceptable for this settlement system.

(ii) Coverage: The bank branches in the following cities will participate in the Local
US Dollar Instruments Collection and Settlement System:

(a) Karachi (b) Lahore (c) Islamabad (d) Rawalpindi (e) Faisalabad
(f) Multan (g) Sialkot (h) Peshawar (i) Quetta (j) Mirpur
(k) Hyderabad.

Collection from all other cities will be arranged/ managed by each bank, by making
internal arrangements, through any one of the above cities.

(iii) Collection & Settlement Schedule:

(a) There are two collection and settlement days per week, i.e. Monday and
Thursday.

(b) If a collection / settlement day happens to be a bank holiday, then it will be

skipped till the next collection/ settlement day.

(iv) Designated Office:

(a) Each bank will designate a branch/Regional/ Head office in Karachi for
presenting outward and receiving inward instruments for collection and
settlement through M/s National Institutional Facilitation Technologies (Pvt.)
Ltd. (NIFT).
(b) NIFT will deal with only one designated office of each bank in Karachi for
settlement of Karachi and upcountry branches.
(c) Each bank may also designate one branch in each city (i.e. from the coverage
list) with whom NIFT and the designated branch of that bank in Karachi, if
required, would liaise for issues regarding collection & settlement relating to
other branches in that city.

(v) Mandatory Settlement: It will be mandatory for the banks operating in Pakistan,
whose Head Offices or branch offices are located in Karachi:

(a) To be a member of this system.

(b) To open US$ settlement account with a minimum balance of US$ 10,000/- for
settlement with SBP-Banking Services Corporation (Bank) Karachi and thereafter
to maintain sufficient balance to cater to the requirements keeping in view their
business volume. The said account will be remunerated on the same interest rate as
for SCRR for FE-25.

(c) To settle payment of US$ instruments drawn on them through this system or to
return unpaid instruments on settlement date.

13
 (d) In case the paying bank does not return the original instrument on the settlement
date to the presenting bank, it will be assumed that the instrument has been accepted
for payment and will be settled through this system accordingly.

(vi) Processing Cycle:

(a) The collection/settlement will be centralized at Karachi. NIFT will interface

with one designated branch of each bank in Karachi only.
(b) Banks will route all inward/outward instruments from their branches in Pakistan
through their designated branch in Karachi.
(c) NIFT will collect/deliver all instruments for inward/outward settlement from the
designated branches of Banks in Karachi, process the collection/settlement and
deliver a consolidated statement to the respective designated branch of the bank.
(d) Each designated branch in Karachi will forward the instruments received in
inward collection to the payee branch of their bank directly for ‘Acceptance’ or
‘Return unpaid’.
(e) The payee branch will settle or return the original instrument, if any, to the
designated branch in Karachi. NIFT will collect all return instruments from the
designated branches in Karachi, process them alongwith inward collection and
then route them to the related designated presenting Bank branch in Karachi.
(f) The Settlement proceeds of the instruments would be communicated to the
concerned branch immediately by electronic or any other means on the same
day for crediting to the concerned depositor’s account.

(vii) Date Stamp: The Collecting Bank will affix the stamp of the date on which
outward instruments would be sent to NIFT for collection.

(viii) Settlement: The net settlement will take place by debiting or crediting the
respective banks’ US Dollar clearing accounts on settlement date.

(ix) Settlement Statements: NIFT will provide a statement of collection / settlement

statistics on monthly basis to ascertain the expenses payable by the lodging
bank to paying bank at the rate of Rs. 100/- per instrument (for cheques drawn
on cities other than Karachi) irrespective of whether the instruments are paid or
returned unpaid. All other reports and information will be produced and
provided on the existing pattern as for rupee clearing. NIFT will provide
stationery and usual collection / settlement preparation material to the branches
as is being done for PKRclearing systems.

(x) Forced Retention: If for some unavoidable reasons the relevant bank is unable to
provide a returned cheque on the specific collection/settlement date due to any
reason beyond control, the designated bank office in Karachi will provide to the
concerned bank alongwith inward clearing instruments, with a copy to NIFT, a
document on prescribed format (agreed between the banks and NIFT) giving
details of the instrument, undertaking that the said instrument will be provided
to the lodging bank directly on availability but not later than the subsequent
collection / settlement date, that instrument will be considered as returned
unpaid.

This process may function in a manner such that the designated bank will furnish
the prescribed document in duplicate to NIFT in place of the returned document and
NIFT will send the first copy to the lodging bank along with other returns, if any, as
a return instrument.

14
(xi) Settlement in case of insufficient balances:
At any point in time when the net debit (inward & outward) cannot be paid out of a
bank’s US Dollar clearing account (due to insufficient balance) held with SBP-
Banking Services Corporation (Bank), Karachi, the State Bank reserves the right to
adopt a suitable alternate. This will primarily take the shape of payment through an
appropriate overnight SWAP from the Pak Rupees clearing account balance of the
bank with SBP to the extent of such shortfall in US Dollar account.

(xii) SWAP Limit for every Bank is advised to each bank individually.

(xiii) Settlement Charges:

NIFT will charge the presenting bank Rs.100/- per instrument for its services and
Rs.100/- for processing a return instrument.

15
 Appendix VI-3

Guidelines on use of deposits mobilized under FE-25 Scheme for financing ofImports/Exports

A. Exports (For financing pre-shipment, discounting/purchase of documents):

(a) Authorized Dealers are allowed to extend the FE-25 Export Loans after taking all
necessary precautionary measures. The Export Loan facility should be backed by an L/C
or firm contract(s).

(b) At the time of allowing the facility, the foreign exchange component of such
facilities should be surrendered to an Authorized Dealer at the buying rate.

(c) 6Authorized Dealers are required to assess the ability of the borrower to repay loan
through repatriation of export proceeds in addition to assessing his repayment capacity
in PKR. In this respect, Authorized Dealers shall keep in their record the assessment
report for each case prepared by them for inspection by the SBP Inspection Team, as
and when required. This report should be assessed by risk management department,
audited by internal audit department and duly approved by the management as per the
bank’s policy taking into account the following:

aa. Financial soundness/repayment capacity of the borrower.

bb. Borrower’s working capital needs.

cc. Export history of the borrower.

dd. Market reputation of the borrower.

(d) These loans should be settled through realization of export proceeds or remittances
from abroad in line with the prescribed regulations. In case the loan is not settled due to
non-shipment/cancellation/partial shipment within the prescribed timelines, Authorized
Dealers shall recover a penalty from the concerned exporter at the rate of one percent
per month or part thereof in the following cases:

aa. In case of non-shipment, penalty shall be recovered from the date of

extension of the loan till settlement of the FE-25 loan.

bb. In case of settlement of the loan after the period prescribed by the State
Bank, penalty shall be recovered for delayed period only.

However, in any case, the penalty shall not exceed 10% of the amount of loan. To this
effect, the Authorized Dealer should get consent/agreement signed by the borrower at
the time of extending the loan. The amount of penalty shall be deposited in favor of

6
FE Circular No. 05 dated May 10, 2017

16
 7
State Bank of Pakistan through RTGS Clearing Account No. 427518. In this respect, a
consolidated statement regarding all such cases will be submitted by Head/Principal
Offices of the Authorized Dealers to the Director, Foreign Exchange Operations
Department, SBP-Banking Services Corporation on monthly basis on prescribed format
(Appendix V-144).

(e) The settlement of FE-25 loans in respect of cases mentioned at (d) above and other
overdue cases under the said scheme, where the amount of loan exceeds USD 50,000/-
or equivalent in other foreign currencies, shall be allowed by SBP through interbank
market on a case to case basis for which Authorized Dealers may approach the
Exchange Policy Department, State Bank of Pakistan, Karachi alongwith the following:

aa) Details of the transaction and certified copies of underlying documents.

bb) Justification for intended settlement of export loan through interbank

market.

cc) Certificate from bank’s internal audit department that the loan was disbursed
after satisfying with the financial health and repayment capacity of the borrower
in line with rules and regulations governing FE-25 Loans. Further, the bank has
exhausted all efforts/means to get the loan settled by the exporter in line with
the prescribed instructions.

dd) Recommendations of the bank for settlement of loan through interbank

market.

(f) As regards outstanding loans amounting to USD 50,000/- or below, the respective
Authorized Dealers may settle the loan itself through interbank market subject to
observance of the above guidelines. This provision shall be applicable on outstanding
loans granted previously as well as on loans to be granted in future.

(g) In case the exporter fails to settle the loan amount as per the prescribed procedure,
Authorized Dealers may convert underlying foreign exchange liability into PKR after
recovery of penalty as mentioned at (d) above.

(h) The SBP’s approval for settlement of FE-25 loan through interbank market shall
not affect adjudicating proceedings, if in progress, with the Foreign Exchange
Adjudication Department, SBP-Banking Services Corporation against exporter/
Authorized Dealer in connection with repatriation of export proceeds from abroad.

(i) Authorized Dealers shall maintain complete record of transactions related to

settlement of FE-25 loans and shall present the same to SBP Inspection Team for
inspection, as and when called for.

(j) If at any stage, it is established that the exporter has misutilized the loan, he will not
be eligible to avail such facility in future. Moreover, violation of any
rule/regulation/instruction on the part of Authorized Dealer would attract regulatory
action under the related provisions of the Foreign Exchange Regulation Act, 1947.

7 EPD Circular Letter No. 22 dated Dec 05, 2017

17
 (k) Authorized Dealers are allowed to adjust foreign currency loan against pre-shipment
finance from the proceeds of the post shipment facility, against which the pre-shipment
facility was allowed earlier, like discounting of foreign bills in foreign currency.

(l) On receipt of export proceeds, the Authorized Dealers would adjust the loan
outstanding against that export bill and PRC can be issued to the extent of export
proceeds at exchange rate on which original financing was allowed by converting into
Pak Rupees accordingly. The reporting of ‘E’/ ‘EFE’ forms would be done on the date
of receipt of export proceeds.

(m) All bank charges on exports and interest on such export loans would be recovered
from inter-bank market against form ‘M’ that would be submitted alongwith the
monthly foreign exchange returns.

(n) For outstanding forward cover and subsequent financing of export bills in foreign
currency, instructions contained in Para 11 Chapter 4 of FE Manual would apply.

(o) The pre-shipment finance allowed against an L/C or firm contract would only be
adjusted through discount of documents against the same L/C or firm contract.

(p) In case, maturity of a pre-shipment export loan under FE-25 deposits falls prior to
the date of realization of export proceeds, exporters have the option to convert the pre-
shipment loan into post-shipment loan, provided the maximum period of the loan (both
pre-shipment & post-shipment) does not exceed 270 days.

B. Imports (Financing against Import Bills)

(a) The facility for imports can be allowed only from the date of actual execution of
import payments in foreign currency by creating a foreign currency loan against the
importer. The maximum period of such loans should not exceed six (6) months from the
date of disbursement.

(b) For repayment of the loan, the Authorized Dealers are allowed to purchase foreign
currency to the extent of loan from inter-bank market at the prevailing exchange rate on
the date of repayment in order to adjust foreign currency loan outstanding against such
importer(s).

(c) Authorized Dealers are allowed to purchase foreign currency from inter-bank market
to cover the interest amount on such loans against submitting ‘M’ forms alongwith
monthly foreign exchange returns.

(d) The reporting of forms ‘I’/ ‘EIF’ would be on the date of actual payment against the
documents.

(e) No forward cover will be provided to importer(s) who avail foreign currency finance
against FE-25. The forward cover facility is allowed only against outstanding import
commitments.

C. Reporting Procedure:

I) Lending to Exporters.

18
 At the time of extending the loan, the transactions will be reported on Schedule ‘E-4’ as
payment for loan under the Code No.1535 or1536 (The disbursement will be made in
equivalent Pak Rs.).

 At the time of adjustment of loan at realization of foreign exchange proceeds of exports,

the realization of export bill will be reported under relevant code HS code on Schedule
A-1. In case of non-realization of export receipts, use purpose code 9543 or 9544 at
Schedule J.

II) Lending to Importers.

 At the time of extending the loan, payment abroad against import will be reported on
Schedule E-2 under relevant HS code. However, at the time of adjustment of loan
purpose code 9545 will be reported on Schedule ’J’ as receipt.

 Authorized Dealers are allowed to utilize the funds under FE 25, generated through the
following sources, for lending for trade related activities i.e. imports and exports:

a) Interbank placements

b) Interbank SWAPs (Buy/Sell $)

 Foreign currency funds generated through SWAPs (Buy/Sell $) from the State Bank
would also be eligible for financing of above trade-related activities.

 Re-discounting of the export documents abroad in Foreign Currency is also permissible

during normal course of business. Authorized Dealers are allowed to remit re-
discounting charges according to para 18 Chapter 14 of the FE Manual.

 Substitution of the Contracts/LCs may be allowed upto a maximum period of six

months from the date of disbursement of the loan. It means that settlement/execution of
the last substituted Contract/LC should not extend beyond six months from the date of
disbursement of loan.

 Authorized Dealers are required to submit FE-25 deposits & their utilization position on
monthly basis to the Director, Statistics and Data Warehouse Department on the format
showing currency wise position latest by the 7th of each month.

19
 Appendix VI-3A

NAME OF AUTHORIZED DEALER …………………….

Summary Statement in respect of Transactions conducted through Foreign Currency Value Accounts (FCVAs) for the Month of …………………
Credit Debit
Trans
fer to
Transfe other Any
Maturity Maturity Investm
Transfer Profit/ r of FCY, Paymen *Current
proceeds proceeds Investme ent in
of Interes funds PKR ts/with market Value
/disinves /disinves nt in terms
Openin funds t to accou drawal of investment
Total tment tment Govern /remune FCY Closing
g from from his/her nt and Remittance/ in PKR made from
Category No.of Inward from from ment rative Cash Balanc
Month Balanc his/her eligible own NRA Payment within FCVA in Govt
of FCVA FCVA Remittance Govt term registere deposit withdr e of
e of own Invest NRVA N Abroad Pakista securities/
s registere /remune d product awal FCVAs
FCVAs NRVA ment with with n terms deposit
d rative securitie of the
with the in the any through at end of
securitie deposit s same
same AD FCY same bank any month
s product AD
AD in mode
Pakist
an
FCVA 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Non‐reside
nt
Pakistani
Resident
Pakistanis
Total

*Market Value include principle and markup/ return.

 Appendix V-4

Monthly Statement of Foreign Currency Accounts

(Foreign Equity, Foreign Currency Commercial Loans/ Insurance etc.)
SBP's
CPEC/ IBAN Country Code
Bank Project Project Account Company Currency Transaction Approval Purpose
Month Non- (A/C where A/C Amount
Name Name Address Name NTN Code Country Code No. and Code*
CPEC No.) Maintained
Date

*Purpose code (as per list enclosed under EPD Circular Letter No. 16 of 2016) specifies head against which the information is required.
Appendix VI-4
 Appendix VI-5

(Figure in '000')
Balance
Others
in Cash Total
Balances with State (Pl.
Financing (Outstanding) Placements with banks Nostro in Utiliza Break Up FE-25 Deposits
Bank Specify)
Account Hand tion
*
s
Within Outside Total Time Demand Savings
Exports Import Total CRR SCRR Total Total Deposits
Export Pakistan Pakistan Placement Deposits Deposits Deposits
Currency
N
on No C
Non
Pre - Post - R n Non- h
Resi Resid Residen Res Resi
Shipm Shipm es Re resid Tot e
dent ent t ide dent
ent ent id sid ent al c
nt
en ent k
t
11=(9 22=( 24=
+10) 16+1 (22
8+20 +23
) 23= )
15=(5
(17
3=(1+ 5=(3+ +8+11
8=(6+7) +19
1 2 2) 4 4) 6 7 9 10 12 13 14 +12+1 16 17 18 19 20 21
+21
3+14)
)

USD
EURO
GBP
JPY
CNY
Other Currencies
in Equivalent US$
Total FE-25 in
Equivalent US$
 Foreign Currency Deposits
(Figure in '000')
Scheme of FCA Reference in FE Manual End Month Stock
Old FCA Chapter 6
FCVA FE Circular No. 02 of 2020
Exporter’s Special Foreign Currency Account Chapter 12
Special Foreign Currency Accounts of Private Power Projects Chapter 6 Para 8
Special Foreign Currency Accounts Chapter 6 Para 9
i) Foreign Oil/Mineral exploration companies and foreign contractors Para 9 (i)
ii) Firms & companies raising foreign equity and foreign currency loans Para 9 (ii) (a)
iii) Entities licensed by Special Technology Zones Authority (STZA) FE Circular No. 08 of 2020
Any Other Foreign Currency Account (Specify)