Authorized Dealers in
Investment Banks, DFIs
Authorized to accept
the present arrangements the foreign exchange, in respect
of foreign currency deposits mobilized under (I) Private
Foreign Currency Accounts Scheme by Authorized Dealers (ii)
under F.E. Circular No.45 of 1985 as amended from time to
time (iii) deposits mobilized by the Investment Banks under
F.E. Circular No.36 of 1992 and (iv)
deposits mobilized by the Development Finance Institutions/Non-Bank
Financial Institutions under specific permission granted
by State Bank of Pakistan is required to be surrendered
to the State Bank. In return the State Bank gives to the
institution surrendering the foreign exchange equivalent
Pakistan Rupees at the rate prevailing on the date of surrender.
The concerned institutions are entitled to receive back
from the State Bank the amount of foreign exchange surrendered
at the same rate at which it was surrendered to the State
Bank. In other words, the State Bank assumes the exchange
Keeping in view the spread available to banks etc. based
on the interest rates which they have to pay at present
in respect of US Dollar and the Japanese Yen and the return
which they earn on the employment of the rupees generated
by the surrender of these currencies, it has been decided
that the State Bank shall recover a forward cover fee at
the rate of 3% per annum on forward cover provided in respect
of foreign currency deposits in US Dollar and Japanese Yen
accepted/renewed/rolled over on or after 1st
July, 1992. The revised Scheme shall be subject to the following
rates of interest payable on the foreign currency deposits
would continue as at present or as may be modified from
time to time by the State Bank. In other words, no change
is to be made in the rates of interest payable on such
foreign currency deposits as a consequence of the said
will be optional for the institution obtaining/renewing/rolling
over the foreign currency deposits under reference to
obtain forward cover from the State Bank or to carry
the risk itself.
present requirement of surrender of foreign exchange
in respect of foreign currency deposits to the State
Bank will continue regardless of forward cover being
obtained or not.
existing arrangements in respect of foreign currency
deposits of other than US$ & J.Yen will continue
as at present.
you opt to obtain forward cover in respect of US$ and
J.Yen term deposits, the aforesaid fee for the relevant
tenure shall be paid by you to State Bank of Pakistan
alongwith the request for forward cover at the time
of surrender of foreign exchange/renewal/roll-over.
As for savings and current deposit accounts, fee at
the prescribed rate will be paid by you at quarterly
rests at the time of surrender of the amount of deposit/renewal
of previous forward cover contract. As for call deposits,
the said fee will be payable at the monthly rests.
rate of fee will be reviewed from time to time keeping
in view the rates of interest obtaining in the international
markets and the rates of return in Pakistan and such
revision will apply prospectively and to deposits accepted/renewed/rolled
over on or after the effective date that may be notified
while revising the fee in question.
While applying for forward cover to the concerned office
of the State Bank of Pakistan, you will furnish the details
of surrenders/renewals/roll-over & calculation of fee
in the proforma "Annexure 'A' " together with
cheque/debit authority for the forward cover fee.