SBP facilitates NRPs availing loans from domestic banks

KARACHI: The State Bank of Pakistan (SBP) on Monday revised instructions to facilitate non-resident Pakistanis in availing loans from the domestic banks.

A circular issued by the central bank said Para 3, Chapter 19 of the Foreign Exchange Manual, in terms of which the banks have general permission to grant loan to individual non-resident Pakistanis and resident foreign nationals in the local currency in Pakistan.

In this respect, it has been decided to facilitate non-resident Pakistan Origin Card (POC) holders to avail consumer financing from the banks in Pakistan.

In this regard, the central bank made an amendment in the foreign exchange manual.

According to the amendment the authorised dealers have general permission to provide loan to individual non-resident Pakistanis and non-resident Pakistan Origin Card (POC) holders in the local currency in Pakistan, subject to observance of the relevant prudential regulations and compliance of AML/CFT requirements.

The State Bank of Pakistan said the purpose of borrowing must be clear, legitimate and duly documented. However, any such lending by the banks would be subject to the conditions: The loan would be liquidated by the borrowers through remittances from abroad in foreign exchange through normal banking channel or by debit to their repatriable rupee and foreign currency accounts, which must be fed through foreign remittances; sale proceeds of property, moveable or immoveable, created from such lending would not be eligible for repatriation, unless otherwise allowed by the SBP through general or specific permission.

Further, the central bank said the banks may also grant rupee loans to resident individual foreign nationals, except for purchasing immovable property and the purposes either restricted by the State Bank or any other prevalent law.

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