Please refer to BPD Circular No.07 dated 21st July, 2006 and subsequent instructions on the subject issued vide BP&RD Circular Letter No.08 and BP&RD letter No.(SLD-02)/317/X/2007-3214 dated 21st March, 2007 and 5th April, 2007 respectively.

In order to facilitate management and accounting of the funds surrendered by the banks under unclaimed Foreign Currency (FCY) Deposits and Funds of Unclaimed FCY Instruments, following guidelines/procedure are hereby issued:

A. Unclaimed FCY Deposits( Frozen in 1998)

i. In case of Frozen Unclaimed FCY Deposits, banks would transfer the equivalent PKR (in r/o four currencies, i.e. US$, GBP, Euro and Yen) to SBP by way of separate cheque or debit authority for each currency involved, at the exchange rate as fixed lastly under the Exchange Rate Cover Scheme with SBP for that deposit.

ii. At the time of surrender of Frozen Unclaimed FCY Deposits to SBP, the exchange rate cover contract provided by SBP on such deposit would be cancelled/ terminated by SBP BSC (Bank) Karachi from the date of transfer of funds to SBP (the date of realization of cheque/debit authority). Exchange cover fee for the un-expired period of the exchange cover contract would be refunded to the bank concerned. The banks while depositing the funds in equivalent PKR with SBP, will provide the following information about the exchange rate cover contract to which the underlying Unclaimed FCY deposits being surrendered in equivalent PKR relates:-

S.NO.	Contract NO.	Date of Contract	Total Amount of Contract (USD/GBP/Euro/ JPY)	Amount to be cancelled (USD/GBP/ Euro/JPY)	Booking Rate

iii. In the case of unclaimed FCY deposits, for which banks have not bought Forward Cover from SBP, funds would be transferred in equivalent PKR by applying the exchange rate applicable on the date of transfer of funds to the SBP. For this purpose, Mark to Mark (MTM) rate of the previous working day issued by SBP on its REUTERS page: SBPK02-03 shall be used to calculate PKR equivalent.

iv. After transfer of PKR amount of Frozen Unclaimed FCY Deposits to SBP, exchange rate exposure would be borne by SBP.

B. Unclaimed FCY Deposits (other than those Frozen in 1998) /Funds of Unclaimed FCY Instruments

i. Unclaimed FCY deposits and funds of un-claimed FCY instruments would be deposited with SBP in six currencies (i.e. USD, GBP, JPY, EURO, CHF and AED) by way of credit to SBP’s respective Nostro Accounts, under intimation to Banking Policy & Regulations Department (BP&RD).

ii. After deposit of unclaimed FCY deposits & funds of unclaimed FCY instruments with SBP, subsequent exchange rate exposure will be borne by SBP.

iii. In case of surrender of unclaimed deposits/funds representing foreign currencies other than six specified currencies, banks will convert the same into USD and surrender the equivalent USD amount to the respective Nostro Accounts of SBP under intimation to BP&RD which in addition to other details should also indicate the original currency and amount in that currency which has been converted into USD. Such unclaimed deposit would be deemed to remain in original currency. Whenever an Unclaimed FCY Deposit /Funds of Unclaimed FCY Instrument denominated in such currencies would become active in future, the bank would claim the amount in equivalent USD against the original currency from SBP. In such instances, in order to facilitate managing of cross currency exposure and having the transparent /objective conversion criteria for all concerned in either case, banks shall use a Bench Mark Exchange Rate for calculating the equivalent US Dollars on both the occasions. For this purpose the MTM exchange rate of the prior working day issued by SBP on its REUTERS pages SBPK02-03 would be used.

Further, all cases for refund of Unclaimed FCY Deposits/Funds will be submitted to BP&RD on the same lines as being practiced in respect of Unclaimed LCY Deposits. Banks/DFIs are advised to ensure that the above guidelines are followed in letter and spirit. Please also make sure that Unclaimed FCY Deposits/Funds already surrendered for the year ended 2006, meet the above criteria. If there is any lacking/ deviation from the above guidelines, Banks/DFIs should take necessary steps to regularize the position accordingly by 30th September, 2007. Cheques / Debit authorities already deposited with SBP on account of surrender of the amount of Frozen Unclaimed FCY Deposits are being returned to the concerned banks to resubmit the new cheque / debit authority for each currency involved, in accordance with the provisions of the Circular.

Please acknowledge receipt.