Circulars/Notifications - Exchange Policy Department  
 F.E. Circular No. 48
October 22, 1998 

All Authorised Dealers
In Foreign Exchange,

Dear Sirs,

DELAYED REALISATION OF EXPORT PROCEEDS

  1. In terms of notification No. F.E.-1/98-SB dated the June 8, 1998 circulated vide F.E. Circular No. 20 of 1998, exporters are required to repatriate export proceeds on the DUE DATE of payment, or within four months from the date of shipment, whichever is earlier. In case of bills sent on collection basis, which includes discrepant documents drawn under letters of credit and not accepted by the L/C opening bank, the DUE DATE would be the date of payment determined as per terms indicated in the underlying contract or four months from the date of shipment, which is earlier. However, in case of any extension allowed by the State Bank in the period prescribed for repatriation of export proceeds, the DUE DATE shall be deemed to be the date of expiry of the period of such extension.

  2. In the case of exporters not repatriating export proceeds within 3 days of the DUE DATE or four months from the date of shipment, whichever is earlier, it has been decided that regardless of the exchange rate prevailing on the date of surrender of export receipts, export proceeds shall be converted into rupees at the rate of exchange prevailing on the DUE DATE of repatriation of proceeds.

  3. In case of delayed repatriation of proceeds, the exporter shall render himself liable to pay on the over due proceeds a return in equivalent US dollars @ 3 per cent above 6-months LIBOR for the currency of the export bill for the period of delay calculated with effect from the expiry DUE DATE. In case of bills denominated in Pak Rupee, the exporter will pay a return in Pak Rupee @ 3 per cent above the normal lending rate of the bank which has handled the documents.

  4. In respect of export bills already over due, the exporters will be entitled to rupee proceeds at the exchange rate prevailing on the date of realisation provided the proceeds are realised within 10 days from the date of issue of this circular. Any over due export proceeds realised after the expiry of ten (10) days from the date of issue of this circular shall be paid at the rate prevailing on the original DUE DATE.

  5. The export refinance facility will cease to be available at the concessional rate after the DUE DATE as determined in para (a) or the maximum permissible period allowed for refinance, whichever is earlier. In such an event, the banks will recover the penalty as prescribed in the Export Refinance Scheme. It is clarified that the export refinance obtained from State Bank of Pakistan will in any event, be repaid to State Bank of Pakistan as per existing procedure.

  6. All Authorised Dealers are directed to furnish the State Bank with a Statement of "Overdue Export Bills", on monthly basis as per proforma annexed herewith. The Statement of "Outstanding Export Bills" prescribed at Appendix V-15 will continue to be submitted. The Statement in the prescribed proforma at Appendix V-17 is no longer required. Regional / Controlling Offices of the bank are required to submit a consolidated statement of all over due cases at the branches under their jurisdiction to the respective Area Control Offices (as specified in para 4, Chapter-I of FE Manual) within 15 days of the date of the Statement. A copy of the Statement shall be forwarded by them to their Head Office, for preparing a consolidated Statement in a diskette form for submission to the Director, Foreign Exchange Department, State Bank of Pakistan, Central Directorate, Karachi within 21 days of the date of the Statement.

  7. Any exporter who fails to repatriate the export proceeds within 90 days of the expiry of DUE DATE, shall be deemed to be a "Defaulter", for all intents and purposes of banking facilities and his name may be included in such a category if not specifically exempted by the State Bank for genuine reasons.

  8. Authorised Dealers are directed to take appropriate measures to ensure that the amount of return recoverable from the exporters is recovered in time for the credit to State Bank of Pakistan's account with National Bank of Pakistan, New York or paid to the concerned office of the State Bank in case of amounts due in Pak Rupees, failing which State Bank of Pakistan will recover the equivalent rupees by debit to Authorised Dealers (Bank) account maintained with it at the market rate.

  9. Authorised Dealers are advised to note the above instructions carefully and immediately convey for implementation of the same to their branches authorised to deal in foreign exchange, as well as to those of their customers who are engaged in export.

       
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