State Bank Eases Deadline for Realization of Export Proceeds

The State Bank of Pakistan (SBP), on Tuesday, eased regulations for the realization of export proceeds. Pursuant to its EPD Circular No. 02 of 2022 addressed to authorized foreign exchange dealers, the central bank clarified that amendments introduced through the circular dated 5 January 2022 will not be applicable on exports where irrevocable letters of credit with a usance period of up to 180 days were issued or established up to the date of issuance. Besides the proposed relaxation, the SBP noted in all such cases, authorized dealers (ADs) shall not allow any change beyond 180 days in shipment date/expiry of LC/enhancement in LC or shipment against expired LCs or any other terms and conditions relating to tenure of the LC after the issuance of the above circular. Moreover, the State Bank opined that “where the terms of sale/ irrevocable letter of credit provide for payment on 120 days’ usance from the date of shipment, it shall be permissible for the exporter to repatriate the export proceeds within 135 days from the shipment date.” The revised sub-para (i) of para 6 has been changed to: Besides the above, the central bank stated that other instructions on the subject shall remain unchanged. It also advised authorized dealers to bring the above amendments to the notice “of all their constituents for meticulous compliance.”