IT exporters allowed retention of 35% proceeds in FC accounts

KARACHI: The State Bank of Pakistan (SBP) has allowed the IT exporters to retain up to 35 per cent of the export proceeds in their foreign currency accounts, a statement issued by the central bank said.

To facilitate the exporters of software, IT and IT-enabled services, the SBP amended its foreign exchange regulations, advising the banks to mandatorily allow, till March 31, 2023, retention of 35 per cent of their export proceeds in special foreign currency accounts.

However, such exporters need to be registered either with the Pakistan Software Export Board (PSEB) or with the Pakistan Software Houses Association (P@SHA).

These instructions will be reviewed in the light of the incremental export performance by the IT sector and realisation of the export proceeds thereof during this period.

The exporters would be allowed to use their retained funds for legitimate business payments or expenses abroad, as per the revised list of purposes issued by the central bank.

The SBP has advised the banks to provide digital channels to open and operate these accounts. The banks can now provide facilitation of outward remittances from the retained proceeds through the issuance of corporate debit cards after conducting necessary due diligence.

Further, the central bank has advised the banks to institute a mechanism for the facilitation and speedy resolution of the customers’ complaints.

The banks are required to nominate focal persons at the head office level and designate an appropriate officer at each branch dealing in foreign exchange business.

The amendments will incentivise the new entrants in this field to focus on exports and enable the existing exporters to boost their businesses, which in turn, will create employment opportunities and increase the foreign exchange earnings of the country.

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