In Foreign Exchange,
refer to the instruction conveyed vide F.E.
Circular No. 12 dated 29th May, 1998 on the
captioned subject. The position has been reviewed and the
following modifications have been made, which are applicable
both to foreign currency accounts and certificates of investment:-
are no restrictions on opening of new foreign currency
accounts by persons other than those mentioned in sub-para (i) of paragraph 1 of F.E.
Circular No. 12 of 1998.
fresh credit, except in respect of interest / profit
accruing on existing deposits, can be made in respect
of the accounts mentioned in sub-para
(i) of paragraph 1 of F.E. Circular
No. 12 of 1998 i.e. accounts of persons resident
in Pakistan, and firms and companies functioning in
Pakistan including foreign controlled companies (which
includes branches of foreign companies).
reference to 'non-resident' employees of the diplomatic
missions accredited to Pakistan, vide paragraph
4 of F.E. Circular No. 12, relates to the diplomatic
officers who are permitted under the foreign exchange
regulations to maintain foreign currency accounts.
relaxation made in respect of foreign currency accounts
of international organizations includes the United Nations
and its agencies. The reference to the non-resident
employees of international organizations relates to
the foreign nationals employed by them. The foreign
currency accounts maintained by the British Council,
JICA, CIDA, ICRC, SDC and the schools run by the Foreign
Missions in Pakistan (viz. American School) are also
exempt from the restrictions imposed vide F.E.
Circular No. 12 of 1998.
deposits which cannot be withdrawn under our instructions
or, where there is no restriction, are not withdraw,
may be rolled over by the banks / NBFIs in consultation
with the account-holders. The State Bank will continue
to provide forward cover on payment of the prescribed
respect of those foreign currency accounts which are
not permitted to receive further credits (except interest
profits), the items in transit, which had originated
from abroad upto 29th May, 1998 may be allowed
to be credited, provided the amounts do not represent
export proceeds or foreign exchange which was otherwise
required to be surrendered to an Authorised Dealer,
and forward cover obtained in the prescribed manner.
would be in order to allow change of the currency of
a deposit from one foreign currency to another foreign
currency, if so desired by the account-holder.
restrictions placed on receipt of funds in foreign currency
accounts, do not apply to the funds received under the
National Debt Repayment Programme.
status of a foreign currency account cannot be changed
from 'resident' to 'non-resident'.
It has also been decided to allow deposits into and withdrawals
from the foreign currency accounts of the following:-
contractors who are working in Pakistan under contract
and who are meeting their operational expenses either
from the foreign currency brought / received by them
from abroad or paid to them by the contracting public
sector agencies in Pakistan, and the foreign sub-contractors
of such contractors.
/ Gas exploration companies and mineral companies, who
finance their activities in Pakistan out of remittances
received from abroad and / or foreign currency payable
to them by a public sector organization in Pakistan,
or foreign currency received for oil/gas supplied by
/ Liaison offices of foreign companies which meet their
expenses out of remittances received from abroad.
opened in terms of the instructions contained in paragraph 29,
Chapter XII of the Foreign
Exchange Manual, to the extent of crediting the amounts
of commission / differential and their use for promotional
publicity, collection of commercial intelligence, purchase
of designs / patterns, market studies, bonafide export
claims and shortfall in realization of export proceeds.
opened in terms of paragraph 7 of F.E. Circular No. 24 of
1995, of the temporary credit of export proceeds
of consignments for which they had obtained foreign
currency loans, pending maturity of the loan.
payment made from the above types of accounts to Pakistan
national living in Pakistan or to firms / companies having
rendered services in Pakistan shall, however, be made in
Pakistan rupee at the Authorised Dealers TT buying rate
(and not @ Rs. 46 to a dollar). Oil / Gas / Mineral exploration
companies may, however, make payment in foreign currency
to the firms of foreign origin if there is a contractual
obligation in this regard, which should be verified by the
Authorised Dealers before allowing payment.
Withdrawals from the accounts of foreign nationals working
in Pakistan who wish to withdraw reasonable amounts for
meeting their expenses in Pakistan and commitments at home
or who are leaving the country will be considered by the
State Bank on case to case basis. This facility may be considered
on the basis of a certificate to be given by their employers.
In partial modification of the instructions issued vide
F.E. Circular No. 14 of 1998, it would
be permissible for the Authorised Dealers to allow withdrawals
from a foreign currency account of a foreign importer for
payment in rupees (at the Authorised Dealers' buying rate)
of the proceeds of goods exported to him from Pakistan,
provided the name of the account-holder and the consignee,
as declared on the 'E' form,
is the same.
It is clarified that the special rate of exchange of Rs.
46 to a dollar applies to those holders of foreign currency
accounts, whether maintained by residents or non-residents,
who will convert them into rupees before 1st
September, 1998. These accounts will enjoy the following
as announced by the Government:
from probe by tax authorities.
from wealth tax for six (6) years according to details
to be announced subsequently by Central Board of Revenue;
from income tax on the interest or profit earned on
the dollar accounts before conversion.
currency deposits having specified maturates which extend
beyond August 31, 1998 can also be converted into rupees
on any earlier date. Authorised Dealer will allow such premature
withdrawals / encasement. In such an eventuality the depositor
will receive a lower profit according to established banking
Inquiries are being received whether the Authorised Dealers
may issue enactment certificates in those cases where the
account-holders withdraw amounts from their foreign currency
funds in rupees. It is advised that there is no objection
to encasement certificates being issued in such cases, for
the actual amounts of foreign currency debited and the actual
amounts of rupees paid.
Application in respect of withdrawals by foreign nationals,
as mentioned in paragraph 3, and
any other hardship case not covered by this circular, may
be referred by the Authorised Dealer maintaining the account,
or by their Head Office / Principal Office in Pakistan to
the Additional Director, Foreign Exchange Department, State
Bank of Pakistan, Central Directorate, Karachi (Fax No.