‘Formulation and Implementation of Prudent Foreign Exchange Policies and Providing the Best Service to the Stakeholders so as to Play Proactive Role in Achievement of Overall Mission of the State Bank.’

Exchange Policy Department (EPD), one of the core departments of the State Bank is responsible for overall stability of the foreign exchange market and is engaged in the process of policy formulation and implementation. It reviews on continuous basis, the existing rules and regulations, to facilitate foreign exchange activities in the country. Foreign exchange business in Pakistan is governed / regulated under Foreign Exchange Regulations Act, 1947 (FERA, 1947). Foreign Exchange Manual outlines the rules and regulations governing foreign exchange business in the country for the guidance of Authorized Dealers (ADs), Exchange Companies (ECs) and general public including local/foreign investors as well as other stakeholders. The changes in instructions/policies/procedures are brought through F.E. Circulars/Circular letters. EPD lays down policy measures in consultations with relevant Government departments, Ministries, various trade bodies, chambers and other stakeholders.

Exchange Policy Department is structured into three divisions namely:
1. Policy
2. Investment
3. Exchange Companies

A brief overview of each division’s objectives / functions is as under:

Policy Division is responsible primarily for dealing with policy matters in the areas of export/ import transactions, issuance of Authorized Dealer’s licence, Foreign Exchange Exposure Limits, Foreign Currency Accounts Scheme, Exchange Risk Cover Fee on Medium & Long Term Loans, analysis of proposals for raising loans / financial obligation by public sector organizations from international donor agencies, management of exchange allocations for public sector enterprises, travel, insurance, compliance / enforcement of inspection report findings of Authorized Dealers (banks) regarding foreign exchange and other allied matters etc. This division maintains contacts with all relevant institutions and stakeholders.

This division primarily facilitates implementation and compliance of policy of the Government for investments in Pakistan and abroad. This is carried out by offering feedback on matters of varied natures, reviewing and updating of investment related policies and activities and operational management while executing transactions in the areas covering Investment abroad by residents, registration of foreign equity, royalty and technical Assistance, Independent Power Projects (IPPs), Foreign private debt including prepayment of private non-guaranteed debt, Oil & Gas payments, Profit remittance by foreign banks and branches of foreign companies, IT related payments etc.

Policy formulation for establishing Exchange Companies (ECs) and ensuring adequate framework for licensing, operating, effective supervision & monitoring thereof are the prime responsibilities of Exchange Companies Division. These activities are carried out in close coordination with other the Field Offices of SBP-BSC and concerned government functionaries etc. It also organizes training and development activities for the respective financial institutions and concerned bodies.