Circulars/Notifications - Exchange Policy Department  
 F.E. Circular No. 02
February 24, 2000 

All Authorised Dealers
in Foreign Exchange,

Dear Sirs,


Please refer to the instructions issued vide F.E. Circular No 12 of 1998 in terms of which there are restrictions on withdrawal in foreign currency from foreign currency accounts (FCAs) except as permitted vide F.E. Circulars issued subsequently. It has been decided to allow persons holding such accounts to transfer their accounts from their existing bank to another bank without involving movement of foreign currency. Such transfers will be made for the entire balance of the concerned accounts alongwith accrued interest, if any, and partial transfer of funds is not permissible. Upon the transfer of such accounts, the existing accounts with the transferring bank will stand closed.

2. Persons wishing to transfer their accounts shall approach their bankers giving the name of the bank branch where they wish the account to be transferred, alongwith a letter from such bank confirming that it is prepared to open the account. The Head Office/branch of the bank, which had surrendered the inward remittances to the State Bank of Pakistan, Karachi/Lahore (as applicable) giving a list of all such requests received during a day showing the names of the accounts holders, balances required to be transferred, the names of the banks where the accounts are being transferred and particulars of the forward contract, if booked with the State Bank, the rate at which forward contract was booked and the amount to be notionally "lifted" against each forward contract. The State Bank will cancel the forward contract for the applicable amount and pay the rupee differential between the booked rate and the rate currently applicable to encashment of FCA's. The forward cover fee, already recovered, would also be refunded for the un-expired period of the contract. The bank which submits the request for transfer of the account will transfer the rupee equivalent of the foreign currency amount to the bank where the account is being transferred. The transferee bank may book fresh forward contract, if it so wishes, at the current applicable rate, and pay the applicable forward cover fee, provided that the forward cover is obtained from the State Bank of Pakistan simultaneously i.e. on the date of transfer of such account from the transferring bank. The transferee bank will treat the account as subject to the same restrictions, as applicable to the account held by the transferring bank. At the time of transfering balances, the transferring bank will need to ensure that the status and title of the account with the transferee bank remain unchanged.

3. Please note that the above general permission does not apply to SWAP (i.e. F.E. 45) deposits, which are being regulated by separate special arrangements.

Yours faithfully,
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