All Authorized Dealers
In Foreign Exchange and
Investment Banks holding
Restricted Authorized
Dealer’s License,

Dear Sirs,

MOBILIZATION OF FOREIGN CURRENCY UNDER PAKISTAN NATIONAL DEBT RETIREMENT PROGRAMME

The Prime Minister of Pakistan has appealed to all Pakistanis abroad to transfer to Pakistan a part of their savings / income that would be helpful for the National Debt Retirement Programme and building up of country’s reserves. For this purposes, it has been decided that all the Pakistani banks having branches abroad would make special arrangements in such branches with immediate effect for receiving foreign currency remittances from Pakistanis abroad under the Programme, keeping in view the legal requirements and guidelines of the concerned authorities of the host country.

2. Under the Programme, all Pakistanis abroad would be expected to remit a minimum amount of US$ 500, or equivalents thereof (except for donations which can be for any amount) by transferring through any overseas branch of a Bank or its correspondent. The amounts will be mobilized in U.S. Dollar, Pound Sterling and Deutsche Mark.

3. Resident Pakistanis can also participate in the Programme by converting their existing short-term foreign currency deposits, or by buying foreign exchange against surrender of FEBCs / FCBCs or by surrendering foreign currency notes / TCs, or by arranging remittance from abroad.

4.i The salient features of the Programme are as under:-

1. The amount remitted may be given as an outright donation.

2. The amount may be sent as Qarz-e-Hasna for a minimum period of 2 years.

3. The amount may be kept as profit bearing Deposit for a minimum period of 2 years. The depositor will be entitled to receive funds in the currency in which the deposit was made. The return payable on quarterly basis on these deposits will be as under:-

5. Bank branches in Pakistan which are not authorized to deal in foreign exchange may also accept the contributions under the Programme and process the same through the nearest authorized branch.

1. If a depositor wishes to received the private on his deposit in rupees, he can so indicate in writing to the concerned bank which will arrange for transfer of the rupee amount to a person designated by him.

2. The deposit will be kept in the name of the depositor. At the time of placement of funds, or afterwards, another person can be designated to receive the amount in case of mishap.

3. Authorized Dealers have agreed to handle all remittances under this Programme free of charge / commission.

4. Under the existing laws, the deposit and return thereon are exempt from all taxes in Pakistan and from compulsory deduction of zakat.

5. On receiving the amount, the concerned overseas branch (and correspondents of the Authorized Dealers at those places at which they have no branch) will issue a remittance receipt indicating name and address of the remitter, the purpose of the remittance i.e. (a) (b) or (c) of sub-para (i) as indicated in the brochure being issue by the Government, the amount and, in the case of deposit, the name and address of the person who could claim the amount in case of mishap to the depositor. In issuing these receipts on the counter, banks will follow normal banking procedure keeping in view the legal requirements and guidelines of the concerned authorities of the host country. If there is any information in the brochure regarding nomenclature of the accounts, the same is for the information of the remitter and the transactions should be reported to the State Bank as per format given in para 5 of this circular.

6. At the end of each day, overseas branches / correspondent will remit the amounts and furnish the relevant particulars to their Head Office / Main Office at a designated address. In the case of amount remitted as deposits, the banks will arrange to issue Fixed Deposit Receipt to be delivered within two weeks from the date of remittance receipt. In the case of Donations and Qarz-e-Hasna the Bank will arrange to pay the rupee equivalent to the State Bank for credit to National Debt Retirement Programme Account No.1 (Donations) and National Debt Retirement Programme Account No.2 (Qarz-e-Hasna) respectively.

7. The Authorized Dealers accepting the deposits will surrender the same to State Bank of Pakistan on the same lines as is being done under the existing foreign currency accounts scheme. State Bank of Pakistan will provide forward cover to the Authorized Dealers concerned on payment of the prescribed fee as under the existing foreign currency accounts scheme. The exchange risk coverage fee prevailing at the time of accepting the deposits will be applicable for the entire tenure of the deposit and will be payable on annual basis in advance.

8. A person making single remittance of US$ 100,000/ to US $ 1 Million (or equivalent in other currencies) would be issued a letter of appreciation signed by the Prime Minister, in addition to the Deposit Receipt. A person sending individual remittance of US $ 1 Million (or equivalent in other currencies) and above will be invited to receive the letter of appreciation personally from the Prime Minister.

6. Authorized Dealers are requested to separately give to the State Bank of Pakistan names and addresses of all those individuals who make a deposit of equivalent to US$ 100,000 and above, indicating the exact amount remitted by them.

7. Authorized Dealers are also required to submit a list showing the names of donors and amount donated by each of them, and another list showing the names and addresses of persons having sent amounts as Qarz-e-Hasna, the amounts sent by each and the due dates of repayments. The State Bank will pass on the lists to a designated officer in the Economic Affairs Division. Ten days before each date of repayment, Authorized Dealers will prepare a list of amounts due for repayment and the name of beneficiaries and send the some to the designated officer, who will authorize the State Bank to remit the amount to the lenders through the same Authorized Dealer.

8. Investment Banks holding Authorized Dealers License and all other Authorized Dealers are also advised to put in place suitable arrangements for mobilization of funds under the Programme.

9. The existing Foreign Currency Accounts Scheme will continue.