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CHAPTER IX BLOCKED ACCOUNTS
1.
Powers of the State Bank to block Non-Resident Accounts. 2.
Definition of Blocked Account. 3.
Banks authorised to maintain Blocked Accounts. 4.
Opening of Blocked Accounts. 5.
Payment to Blocked Account deemed as a good Discharge. 6.
Items payable to Blocked Accounts. 7.
Procedure regarding Payments to
Blocked Accounts. 8.
Pakistani Emigrants-Blocking of Accounts. 9.
Operations on
Blocked Accounts.
1.
Powers of the State Bank to block Non-Resident Accounts. Section
6 of the Act confers powers on the State Bank to block accounts in Pakistan
of any person resident outside Pakistan and to direct that payment of any
sums due to a non-resident may be made only to such a blocked account. 2.
Definition of Blocked Account. A
blocked account means an account opened as a blocked account at any branch
or office in Pakistan of a bank authorised in this behalf by the State Bank
or an account blocked by the order of the State Bank. 3.
Banks authorized to maintain Blocked Accounts. All
Authorised Dealers in foreign exchange are permitted to maintain blocked
accounts subject to the conditions laid down in this chapter. In certain
cases, banks other than Authorised Dealers in foreign exchange may be
authorised by the State Bank to maintain blocked accounts. 4.
Opening of Blocked Accounts. A
blocked account may not be opened in the name of a resident of Pakistan
unless it is held jointly with a non-resident. No blocked account may be
opened by an Authorised Dealer or an existing 'free' account blocked except
under directions from the State Bank. 5.
Payment to Blocked Account deemed as a good Discharge. Sub-section
(1) (b) of Section 6 of the Act provides that where the State Bank has
directed that any payment due to a non-resident may be made to a blocked
account in his name with a bank in Pakistan, the crediting of the sum to the
blocked account shall, to the extent of the sum credited, be a good
discharge to the person making the payment. 6.
Items payable to Blocked Accounts. The
State Bank may not approve certain remittances in settlement of liabilities
to non-residents under the current Foreign Exchange regulations. Payments in
discharge of such liabilities to non-residents can only be allowed to be
made to blocked accounts. Amounts due to a Pakistani who has emigrated to
another country and all amounts due to a resident of India will be allowed
to be paid only into a blocked account of the beneficiary. 7.
Procedure regarding Payment to Blocked Accounts. Where
State Bank directs that a payment be made to a blocked account only, it may
be made either: (i) by a banker's payment order marked 'payable to blocked
account of ____________________only' or (ii) by a crossed cheque or warrant drawn in favour of the
beneficiary and marked with the words "Payable to blocked account of
payee only." Where such a cheque or warrant is sent to a non-resident,
it is desirable that the payee should arrange for the opening of a blocked
account with an Authorised Dealer before forwarding the cheque to that bank
for collection. 'Form A-7' with the name of the payee as the
transferee and clearly marked 'Blocked Account' must be submitted to the
State Bank for prior approval. The collecting bank must endorse cheques,
warrants or drafts so marked "received for the credit of blocked
account at ………………………… (Bank and Branch)" before
presenting them for payment. The paying bank may not pay such instruments,
unless they are properly marked and unless Form A-7 has been approved by the State Bank for
payment to a blocked account. After payment has been made it must endorse
the form on the back "Payment made to blocked account at
………………………… (Bank and Branch)". The amount which the
State Bank has directed to be placed to a blocked account, must be
immobilised pending the opening of the account and may not be used for any
other purpose except with the prior approval of the State Bank. 8. Pakistani Emigrants-Blocking of
Accounts. Bank
accounts and securities belonging to Pakistan and foreign nationals residing
permanently in Pakistan, who emigrate to foreign countries, should be
treated as blocked. For blocking the accounts and securities of intending
emigrants the State Bank will issue necessary instructions to their bankers.
Some times Pakistan nationals who had gone abroad for purposes other than
'Migration', take up permanent residence in a foreign country. As and when
such cases of their clients come to the knowledge of Authorised Dealers, it
will be their responsibility to report them to the State Bank for
instructions as to whether or not the bank account/securities of the person
concerned should be blocked. In such cases pending receipt of instructions
from the State Bank, the securities should be immobilised and no operation
on the bank account should be allowed without its prior approval. 9. Operations on Blocked
Account. The
State Bank may issue special instructions regarding operations on individual
blocked accounts. In the absence of any such special instructions, no
payments into or withdrawal from blocked accounts may be made unless prior
approval of the State Bank has been obtained. Balances held in blocked accounts may be invested in "approved securities" expressed to be payable in Rupees or in fixed deposit with the bank in which the account is held subject to the prior approval of the State Bank. Shares or securities in which investment is permitted by the State Bank must be bought through the bank with whom the blocked account is kept and registered in the name of the account holder, the address being his permanent residential address outside Pakistan. Alternatively, securities so purchased may be registered in the names of the banks keeping the blocked accounts or their nominees in Pakistan. The securities should not be held in bearer form and should not be sold or transferred without the permission of the State Bank. |
