Circulars/Notifications - Exchange Policy Department  
 FE Circular No. 04 of 2022

August 01, 2022

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

Dear Sir/Madam,

Amendment in Regulatory Instructions - Foreign Currency Business Value Account (FCBVA)

      Attention of Authorized Dealers (ADs) is invited to Chapter 6 of the Foreign Exchange Manual, which provides general instructions for opening and maintaining foreign currency accounts in Pakistan.  

2. In order to facilitate the business entities incorporated abroad with majority shareholding of non-resident Pakistanis, it has been decided to introduce a separate category of foreign currency account named as Foreign Currency Business Value Account. Accordingly, following new para 8B has been inserted after para 8A in Chapter 6 of the Foreign Exchange Manual:

Para 8 B. Foreign Currency Business Value Account (FCBVA):

(I) Authorized Dealers (ADs) may open ‘Foreign Currency Business Value Account (FCBVA)’ of the legal entities incorporated or registered abroad and majority (51% or more) owned and/or controlled by NRPs and/or non-resident POC holders. These entities could be Companies, Associations, Foundations, Limited liability partnerships (LLPs), Societies, Trusts, Waqfs and /or other similar legal arrangement. However, this will not include sole proprietorships or unregistered partnerships. Operations of the Foreign Currency Business Value Account (FCBVA) shall be governed by the regulations mentioned below:

(II) General Operations

     a) ADs may allow operations in FCBVA through electronic channels besides conventional modes in practice. ADs      may also issue cheque book, if required by the authorized account operators.
     b) ADs are required to provide online real time convertibility from FCY to PKR based on the request made by the      authorized account operator electronically for the eligible debits from the account. For the sake of transparency,      the ADs shall indicate the exchange rate applicable to the transaction.
     c) In case FCBVA becomes dormant due to non-operation, ADs shall devise a mechanism, aligned with applicable      regulations, to reactivate the account digitally.
     d) ADs will ensure regular monitoring of FCBVAs to mitigate ML/TF risks.

(III) Credits to the Foreign Currency Business Value Account

      a) Remittances received from abroad through banking channels.
      b) Transfer of funds from its own NRBVA maintained in PKR with same AD
      c) Profit, mark-up, return or proceeds of sale or maturity of permissible investments made from FCBVA
      d) Reversal of any erroneous debit from FCBVA.

(IV) Debits from the Foreign Currency Business Value Account

a) Investment in permissible securities, provided that the relevant laws/regulations permit such investment, as under:
           i) Only FCY denominated Government of Pakistan’s registered debt securities.
           ii) FCY denominated term deposit/remunerative product scheme of same AD.
The funds for the above investments shall be transferred by the ADs only in the eligible products, through the instructions received from the authorized account operator in this behalf.
b) Transfer of funds to its own NRBVA maintained in PKR with the same AD.
c) Transfer to any other FCY or PKR account.
d Remittance or payments to the extent of balance available therein, without any prior approval of the State Bank of Pakistan.
e) Any payment in PKR in Pakistan. However, any amount so paid shall not be allowed to be credited back into the account, except as otherwise permissible under the regulations.
f) Reversal of any erroneous credit entry.

3. ADs are advised to bring the above instructions to the notice of all their constituents for meticulous compliance.

Yours truly,


(Athar Ghafoor)
Additional Director

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