a.
The bank will take all possible measures to verify the bonafides
and genuineness of the transaction while processing advance
payment request and may get the credit worthiness report
of the foreign supplier before allowing advance payment.
In order to secure advance payment, the bank may also ask
the importer to obtain performance guarantee from the supplier’s
bank.
b.
The bank will obtain an undertaking from the importer that
in case goods are not received for any reason within the
period of four months, the bank as well as the customer
will ensure repatriation of the advance payment back.
c.
In case the importer is unable to import goods against advance
payment within four months or the underlying contract is
cancelled, the bank will recover a penalty @1% per month
or part thereof on the amount of advance payment from the
date of remittance till date of submission of shipping documents
or repatriation of advance payment. The bank will deposit
the penalty amount with the Exchange Policy Department,
State Bank of Pakistan, Karachi through DD/PO. A monthly
consolidated statement of all such cases will be submitted
by head office of each bank to the Director, Exchange Policy
Department, State Bank of Pakistan, Karachi.
d.
If a consistent behavior as mentioned at (c) above is observed
where actual imports do not take place against advance payments,
Authorized Dealer may debar the concerned importer from
making any future advance payments under intimation to Exchange
Policy Department, State Bank of Pakistan, Karachi. Strict
compliance in this respect be ensured by ADs.