Attention of Authorized Dealers (ADs) is invited to Chapter 8 of the Foreign Exchange Manual, which provides general instructions regarding opening and maintenance of Non-resident Rupee Accounts, Repatriable and/or Non-repatriable with ADs in Pakistan.
2. In order to facilitate Non-Resident Pakistani (NRPs), to open and operate non-resident PKR account through digital means and to invest in shares quoted on the Stock Exchange(s) in Pakistan, residential & commercial real estate, government of Pakistan debt securities and term/ remunerative deposit products of ADs on repatriable basis, it has been decided to introduce a separate category of PKR Account named ‘NRP Rupee Value Account (NRVA)’. Moreover, the definition of resident and non-resident person/entity given in Para 1, Chapter 8 of FE Manual has been amended to align it with the definition prescribed in Income Tax Law. Accordingly, following changes have been made in the Chapter 8 of the FE Manual:
i. Para 1 – Introduction – of Chapter 8 shall be replaced with the following:
Accounts of individuals, firms or companies resident outside Pakistan are designated as non-resident accounts. For the purpose of this Chapter, the resident and non-resident individual and entity, shall have the same meaning as ascribed to them in the applicable Income Tax law/regulation except for an employee or official of the Federal Government or a Provincial Government posted abroad in the tax year, who shall be treated as non-resident under these regulations. This chapter sets out the regulations governing non-resident rupee accounts opened and maintained by the following individuals and entities other than banks:
a) Non-resident Pakistanis (NRPs).
b) Foreign nationals except those who have obtained work visa/permit to work in Pakistan.
c) Firms, companies, etc. which are incorporated/registered outside Pakistan.
ii. Sub-Para (i) & (ii) of Para 2. Opening and Maintaining of Non-resident Rupee Accounts of Persons other than Banks shall be replaced with the following:
(i) ADs may open and maintain the following categories of non-resident rupee accounts of the individuals and entities mentioned in Para 1 above:
a) Non-resident Rupee Account-Repatriable (NRAR).
b) Non-resident Rupee Account-Non-repatriable (NRAN).
c) NRP Rupee Value Account (NRVA) for Non-resident Pakistanis only.
(ii) ADs may allow opening and maintenance of above accounts in compliance with applicable regulations, including the AML/CFT regulations, and their own policies and procedures. ADs may also collect all documents related to account opening through their overseas branches, representative offices or banking subsidiaries abroad. In this respect, the ADs should ensure that the account opening forms etc. and trained staff are available at aforesaid branches, representative offices or subsidiaries abroad. The overseas branch, representative office or banking subsidiary, after fulfilling account opening formalities, shall forward related documents electronically to the head office/designated branch of the AD in Pakistan for further processing. In view of the account holders being non-residents, ADs are encouraged to make necessary arrangements in their systems and procedure to allow opening and maintenance of these accounts through digital channels.
iii. New Para 8 – Operations in NRP Rupee Value Account (NRVA) – has been added as under
i) ADs may open ‘NRP Rupee Value Account’ of non-resident Pakistani individuals only, in addition to other non-resident rupee accounts categories mentioned at Para 2 of this chapter.
Operations of NRP Rupee Value Account shall be governed by the regulations set out below:
ii) General Operations.
iii) Credits to the NRP Rupee Value Account.
- ADs will enable operations in the account through the digital channels e.g. internet/mobile banking, ATM/ Debit cards, besides the conventional modes in practice. The ADs may also issue cheque book to the account holder, if required.
- ADs may issue supplementary ATM/Debit cards as per applicable laws /regulations and banking practices.
- In case debit cards are used outside Pakistan, settlement thereagainst shall be made by the AD through interbank.
- ADs may allow non-resident Pakistanis to open the account jointly with other residents/non-residents, as per applicable laws/banking practices. These accounts should, however, be treated as non-resident accounts.
- In case the account becomes dormant due to non-operation, ADs shall devise a mechanism to reactivate the account digitally, in compliance with the applicable regulations.
- ADs will ensure ongoing monitoring of these accounts to mitigate ML/FT risk.
iv) Debits to the NRP Rupee Value Account.
- Remittances received from abroad through banking channels.
- Transfer of funds from account holders’ own Foreign Currency Value Account (FCVA) and other NRP Rupee Value Account (NRVA) with the same AD.
- Proceeds from disinvestment/sale/maturity of Government of Pakistan’s debt securities, residential and commercial real estate, quoted shares, term deposits, and profit/rent/dividend/ /interest on such securities/properties/shares/ deposits received on account of investments made from the account as mentioned at sub-para (iv) (a) below.
- Reversal of any incorrect/wrong debit in the account.
- Investments in the following, provided that the relevant laws/regulations permit such investment:
- Registered Debt securities of Government of Pakistan (T-bills, PIBs, Sukuk and any other registered debt securities of the government including CDNS securities).
- Shares quoted on the stock exchange(s) in Pakistan.
- Residential and commercial real estate.
- Term /remunerative deposit products of the AD maintaining the account.
The transfer of funds for the above investments shall be allowed by the ADs through the special instructions received from the account holder in this behalf. For investments mentioned at (1) & (2) above, the procedure prescribed for investment/ disinvestment at Para 9 Chapter 20 of the Foreign Exchange Manual shall be followed while for investment mentioned at (3) above, the terms and conditions prescribed at Annexure-A, at the end of this chapter, shall be followed.
- Transfer of funds to account holder’s own Foreign Currency Value Account (FCVA) and other NRP Rupee Value Account (NRVA) with the same AD.
- Transfer of funds to other FCY, PKR account and non-resident Rupee account – non-repatriable (NRAN) with any bank in Pakistan.
- Remittances and Payments outside Pakistan to the extent of balance available in the account, without any prior approvals from the bank or the State Bank, except for investment in real estate which will be subject to compliance with terms & conditions given in Annexure A para 1 (d).
- Any local withdrawal or payment in PKR to any person resident in Pakistan. However, any amount so paid shall not be allowed to be credited back into the account.
- Reversal of any incorrect /wrong credit entry in the account.
After the addition of new Para 8, previous Para 8 shall be renumbered as Para 9.
3. ADs shall submit a consolidated monthly statement of transaction(s) executed from NRVA on the attached format (Annexure-B) to [email protected] through their head/principle office by 7th of the ensuing month for each reference month.
4. ADs are advised to bring the above instructions to the knowledge of all their constituents for meticulous compliance.