Circulars/Notifications - Exchange Policy Department  
 FE Circular No. 07 of 2021

August 05, 2021

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

Dear Sir/Madam,



            As Authorized Dealers are aware, the State Bank of Pakistan is in the process of revising the Foreign Exchange (FE) Manual in consultation with different stakeholders, including Authorized Dealers, in the phased manner. In this respect, thirteen chapters of the FE Manual have already been revised through FE Circulars No. 14 of 2018, 03 of 2019, 01, 05 & 06 of 2021 and placed at the SBP’s website.

2.            Now, the following chapter of the Manual also stands revised:

  S. No.

Chapter No.

Title of Chapter



Commercial Remittance

3.            In the revised Chapter 14, following major changes have been made:

  1. Para 4A to 4D (New): Instructions on logistic/trade related remittances such as payment of Container Detention Charges, Demurrage Charges, Surplus Port Disbursement Funds, Disbursement of Cash to Master of Ship arriving at Pakistani Port, have been introduced with partial or complete delegation to Authorized Dealers.
  2. Para 8(ii) Amended: Regulations on remittance on account of chartering the foreign ships/aircrafts have been revised to delegate powers to Authorized Dealers to process requests for payment of charter cost direct to Owner/Operator/Commercial Operator of vessels/ships/tankers/aircraft.
  3. Para 12 Amended: Instructions on remittance of Royalty, Franchise and Technical Fee (RFT) have been revised to align them with current business environment.  Further, in order to promote ease of doing business, function of processing requests for acknowledgment of RFT agreements has been delegated to Authorized Dealers along with detailed guidelines in the matter.
  4. Para 12A (New): Detailed regulations on Business Processes Outsourcing for non-core activities have been introduced.
  5. Para 15 (Amended): Regulations on remittance of profit and head office expense by branches of foreign companies have been revised whereby function of processing such requests has been delegated to Authorized Dealers for the facilitation of stakeholders.

4.            The existing chapter of the Foreign Exchange Manual is being replaced with the revised chapter at the SBP’s website, which is available at the following link:

5.            In order to implement the revised policy on RFT (Para 12, Chapter 14 of FE Manual), Authorized Dealers shall set up a centralized unit to facilitate applicants. The unit shall be responsible for, inter alia, review and acknowledgment of RFT agreements, issuance of internal approval to respective branch for issuance of acknowledgment letter of the agreement as well as designation of the banker and maintenance of party wise record of agreements acknowledged and remittance effected there against. The said unit shall be staffed with officers well versed with foreign exchange regime headed by a senior officer. Authorized Dealers shall submit the compliance, in this regard, to this office within 15 days of issuance of this circular. The said unit shall ensure strict compliance with the provisions of policy during processing the cases and referring the cases to SBP where regulatory approval is required. In case non-compliance of the provisions of RFT policy is observed, appropriate enforcement action may be initiated against the delinquent Authorized Dealers under relevant provision of Foreign Exchange Regulation Act, 1947.

6.            The internal Audit function of the Authorized Dealer shall also be required to conduct periodic risk based internal audit of commercial remittances allowed by the bank under various provisions of Chapter-14. The audit report shall also be presented to the audit committee of Board of Directors of the Authorized Dealer for information and necessary action, if any.

7.            Authorized Dealers are advised to bring the above development to the notice of all their constituents for meticulous compliance.

Yours truly,


(Arshad Mehmood Bhatti)

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