Circulars/Notifications - Exchange Policy Department  
FE Circular No. 05 of 2015

April 08, 2015



The Head/Principal Offices of all
Authorized Dealers in Foreign Exchange

Dear Sirs / Madam,

Advance Payment against Import Invoice upto US$ 10,000

Attention of the Authorized Dealers is invited to Para 1(b)of FE Circular No. 03 dated April 29, 2008 in terms of which State Bank restricted advance payment against import invoices to specific goods/sectors only.

In order to facilitate importers to cater to their genuine small import needs, it has been decided to restore the advance payment facility upto US$ 10,000/- or equivalent thereof in other foreign currencies per invoice for import of all eligible items without requirement of letter of credit or bank guarantee. However, the facility shall be subject to the following terms and conditions:

  1. The bank will take all possible measures to verify the bona-fides of the importer and genuineness of the transaction while processing the advance payment request.
  2. The bank will obtain an undertaking from the importer that in case goods are not received within the period of four months for any reason, the bank will recover a penalty @1% per month or part thereof on the amount of advance payment from the date of remittance till the date of submission of shipping documents or repatriation of advance payment. The bank will deposit the penalty amount through DD/PO to the Director, Foreign Exchange Operations Department, SBP, Banking Services Corporation, Karachi on quarterly basis alongwith a report on prescribed format (Annexure-I).
  3. In case the goods cannot be imported for any reason within the prescribed time, the bank and the importer will ensure repatriation of the advance payment back.
  4. If a consistent behavior is observed on part of an importer who is unable to import goods against advance payment within four months, the bank may debar the concerned importer from making any future advance payment.

Authorized Dealers are advised to ensure strict compliance of above instructions.

 



Yours truly,

Sd/-

( Fazal Mahmood )
Director


       
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