In supersession
of the relevant instructions issued from time to time
on the subject of operation of Foreign Currency Accounts
(FCAs), affected by F.E. Circular No. 12 of 1998 (as amended from time
to time) it has been decided as follows:-
1. FCAs
will continue to remain subject to the limitation on withdrawal
in foreign exchange except in the exempted categories.
However, as announced before, the deposit holders are
at liberty to convert them in rupees at the State Bank's
official buying rate.
2. In addition
to the above the holders of these accounts will be permitted
to purchase U.S.Dollar Savings Bonds of the Government
of Pakistan against the outstanding balances in their
Foreign Currency Accounts. These Bonds will be for the
tenure of 5, 7 and 10 years and will bear profit as per
the details given below:-
5 years |
6 months' LIBOR |
7 years |
6 month's LIBOR
plus 1% |
10 years |
6 month's LIBOR
plus 2% |
The Bonds
will be issued in the denomination of US$ 100, US$ 1,000,
US$ 10,000 and US$ 100,000.
3. The
amounts of profit on the Bonds will be payable to the
residents in Pakistan rupees at the State Bank's official
buying rate. The payment of profit to the non-residents
will be in US Dollars. The profit will be paid to the
holders at half-yearly intervals. The principal amount
would be payable both to residents and non-residents in
US Dollar.
4. These
Bonds will be issued by the Authorized Dealers on behalf
of the Government. The detailed procedure of sale/purchase
of the Bonds is being separately notified to the Authorized
Dealers.
5. The
Bonds will be transferable by endorsement and delivery
tradable in the market.
6. Bonds
can be used as collateral for obtaining loans in Pakistan.
7.
Bonds shall not be encashable in dollar before the date
of maturity. The holders of the Bonds will, however, be
free to encash the bonds in rupees any time before the
maturity date at the then prevailing official exchange
rate.
8.
The foreign currency bonds and the proceeds thereof, shall
be exempt from levy of Wealth Tax for a period of six
years and shall enjoy immunity from divulging the source
of foreign exchange.
9.
The investments made in these Bonds and profit earned
thereon shall be exempt from Income Tax and deduction
of Zakat.
10. There
shall be no maximum limit for the purchase of these bonds.
11. The
face value of the Bonds shall be encashable on maturity
in US Dollars.
12. Till
the stock of the Bonds is got printed and supplied tot
he Authorised Dealers, temporary receipts will be issued
by the Authorised Dealers for the purchase of such bonds
which will be exchanged with the Bonds as soon as those
become available.
13. The
Bonds will be registered bonds and in case of their issue
to the non-residents, their export will be allowed.
14.
In case of issuance of these Bonds against the balances
held in the foreign currency accounts upto 30-6-1998 and
interest earned thereon, the Authorized Dealers, simultaneously
with the issuance of temporary receipts / Bonds, will
pay to the State Bank the rupee equivalent of the US Dollar
amount of the Bonds at the exchange rate at which forward
cover was obtained from the State Bank and will get the
relative amount of the forward covers cancelled. State
Bank will refund the forward cover fee paid by the Authorized
Dealers for the unexpired period of the covers, if any.
In cases where no forward cover was taken by the Authorized
Dealers against the deposits, rupee payment will be made
to SBP at the official buying rate obtaining on the date
of transaction.
15. For
issuing the US Dollar Bonds, the D.M / J.Yen / P.Stg.
amounts of the foreign currency deposits will be converted
into US Dollar by crossing the State Bank's spot buying
rate for US Dollar with the rates of these currencies
published by the Foreign Exchange Rates Committee for
"foreign currency accounts".