of Authorized Dealers is invited to Para 1 of F.E. Circular
No. 8 dated July 08, 2008 in terms of which forwarded booking
against all types of imports was temporarily suspended.
order to meet the genuine business needs of importers, it
has been decided to restore the said facility with immediate
effect subject to compliance of all related instructions contained
in Chapter IV, FEM-2002 and the following terms and conditions:
Forward cover facility will be made available to importers
against the Letter of Credit only.
No forward cover facility will be provided for a period
of less than one month. Roll over in those cases where import
payment is not made in accordance with the schedule, will
be allowed subject to the condition that the roll over is
not less than one month
In terms of instructions contained in chapter IV of F.E.
Manual 2002, banks will ensure abinitio that the facility
is being availed for genuine import transaction and that
the importers do not hedge more than the underlying exposure.
Furthermore, if during SBP’s inspection or at any
point of time, it is found that the said facility was misused
for and not against genuine transactions, action will be
taken by SBP under Foreign Exchange Regulation Act, 1947,
against the concerned bank and the importer.
4. As per the existing regulations, all forward contracts
against which the L/Cs are cancelled are required to be
closed out on maturity and differential is settled between
the importer and the bank. However, all such cases, where
underlying L/Cs were cancelled will be submitted to SBP
on maturity with full details, reasons and justification,
for further action by SBP as deemed appropriate in terms
of regulations under the FERA Act 1947.