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SBP asks exchange companies to adhere to rules and regulations

KARACHI (June 17 2005): The State Bank of Pakistan (SBP) has directed all the exchange companies to strictly adhere to the rules and regulations and not effect remittance on account of trade-related activities/payments against services/commission, etc, whether on account of individual or on behalf of corporate clients.

“In order to ensure adherence to the above in true spirit, while accepting funds for remittances abroad, the exchange companies are advised to exercise maximum care and carry out necessary due diligence on their part to ensure that the remittances are on personal account only and in no way these relate to trade-related transactions.”

According to EPD Circular Letter No 11/Policy. 24 (1)/2005, the SBP said that it has been observed that certain exchange companies are indulging in outward remittances on account of trade-related transactions/payment of services/commission, etc.

In this respect, attention of the exchange companies is drawn to the rules and regulations governing their business, in terms of which an exchange company is authorised to effect outward remittances only on personal account of individuals, ie, personal financial transactions and not those related to an individual's trade or business requirements.

Further as per the F.E. Circular No 9 of July 30, 2005, corporate clients may approach for remittances only on account of payment of royalty, technical/franchise fee, provided NOC to this effect is provided to the exchange companies from the designated authorised dealers, the SBP said.

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