Major Restrictions Imposed on Individuals Having Foreign Currency Accounts in Pakistan

In an extraordinary development, major restrictions have been imposed on the individuals having foreign currency accounts in Pakistan from October 9, 2020.

Ministry of Finance has tightened regulations for the Pakistanis having foreign currency accounts in the country. The Finance Ministry here on Friday issued foreign currency account rules 2020 which have been enforced from October 9, 2020.

The rules governing the foreign currency account of individual noted that a foreign currency account of an individual may be credited with the remittance received from abroad through banking channel except;

  • Payment of goods exported from Pakistan
  • Payment for services rendered in or from Pakistan
  • Proceeds of securities issued or sold to non-resident
  • Any foreign exchange borrowed from abroad under any general or special permission of the State Bank of Pakistan; provided that the SBP may issue any general or special permission for credit the account.

An expert told ProPakistani that the individuals having foreign currency accounts in Pakistan now cannot credit remittance received on account of payment of goods exported from Pakistan; payment for services rendered in or from Pakistan; proceeds of securities issued of sold to non-resident and any foreign exchange borrowed from abroad.

Under the new regulations, a foreign currency account shall not be credited with any foreign exchange purchased from an authorised dealer, exchange company or money changer except as allowed by the SBP through general or special permission under any law.

However, foreign currency brought from abroad and dully declared at the point of entry into Pakistan with the Pakistan Custom may be credited in the account.

There will be no restriction on cash withdrawal or transfer from the foreign currency account, new regulations said.

The regulations stated that the federal government was making those rules in exercise of the powers by Section 11, and the second proviso to sub-section (4) of Section 5 of the Protection of Economic Reforms Act, 1992.

A foreign currency account may be credited through transfer from another individual foreign currency account.

Proceeds realized on account of profit, return and the principal amount of investment made in any foreign currency-denominated or foreign currency linked scheme of the government of Pakistan may be credited into the account, regulations added.

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