Circulars/Notifications - Exchange Policy Department  
 EPD Circular Letter No. 17 of 2020

August 17, 2020


The Presidents/Chief Executives of
All Authorized Dealers in Foreign Exchange

Dear Sir/Madam,

Amendment in Guidelines on Use of Deposits Mobilized under FE-25 Scheme for
Financing Exports/Imports Amid COVID-19 Pandemic

       Attention of Authorized Dealers (ADs) is invited to Appendix VI-3 Chapter 6 of the Foreign Exchange Manual regarding guidelines on use of deposits mobilized under FE-25 Scheme for financing of Imports/Exports and other relevant instructions issued from time to time.


2.       In view of the global outbreak of COVID-19, which has adversely affected, inter alia, the international trade transactions, it has been decided to make the following amendments in the foreign exchange regulations to facilitate the exporter and importers in settlement of their FE-25 loans:

A. Para A Sub-Para (p) of Appendix VI-3, Chapter 6 - Exports (For financing pre-shipment, discounting/ purchase of documents)

      Authorized Dealers may extend the maximum period of 270 days (both pre-shipment & post-shipment), allowed for settlement of export loan in terms of above referred sub-para, up to further 180 days, thus making total tenor of the loan to 450 days. This extension shall be provided by ADs for loans maturing up to September 30, 2020 and shall be subject to submission of satisfactory explanation by the exporter, along with supporting evidences, showing that the delay in realization of exports proceeds was caused due to COVID-19 pandemic. Moreover, in case of pre-shipment FE-25 loans where the export contract has been cancelled, the bank may allow settlement of loan through realization of exports proceeds against substitute contracts/LCs, during the extended period of 180 days.


B. Para B Sub-Para (a) of Appendix VI-3, Chapter 6 - Imports (Financing against Import Bills)

         Authorized Dealers may extend the maximum period of 6 months, allowed for settlement of import loan in terms of above referred sub-para, up to further 180 days, thus making total tenor of the loan to 360 days. This extension shall be provided by ADs for loans maturing up to September 30, 2020 and shall be subject to submission of satisfactory explanation by the importer, along with supporting documents, evidencing inability of the importer to settle the loan within the prescribed time.

3.       All other instructions related to the above shall remain unchanged.

4.       Authorized Dealers are advised to bring the above instructions to the knowledge of all their constituents for meticulous compliance.

 


Yours truly,

Sd/-

(Arshad Mehmood Bhatti)
Director


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