Unisame seeks SBP permission for overseas merchanting business

Staff Reporter BOL News

25th Oct, 2021. 09:46 pm
Government borrowed 16% more from commercial banks

A picture of the State bank of Pakistan building. Photo: File

KARACHI: The Union of Small and Medium Enterprises (Unisame) has urged the State Bank of Pakistan (SBP) to clarify the legality of three party overseas merchanting business to enable start of the work from Pakistan rather than involving the UAE firms and banks, a statement said on Monday.

As such, the central bank website recognises the merchanting transactions and has indicated the method and procedure. This information needs to be updated, experts said.

Unisame president Zulfikar Thaver said that most of the business is being done from Dubai and unnecessarily commissions are being paid to the Dubai firms, whereas this can easily be done from Pakistan provided the banks facilitate indenters/exporters.

“It is high time our banks learn modern banking and fully facilitate merchant exporters and importers,” he said.

“Our exporters purchase goods from their reputable suppliers from overseas and then re-export it to their contacts in other countries.

The UAE firm and the nominated bank acts as an intermediary and facilitates the exporters in Pakistan and his supplier in the country of origin and also the importer who is the buyer and pays the value of the goods to the UAE intermediary who reimburses it to the Pakistani exporter.

Thaver said that there is no need for the intermediary role of the UAE and any commercial bank in Pakistan can play this role satisfactorily and accommodate the transaction smoothly by following the contract conditions or the letter of credit terms and clauses thoroughly.

The goods would be directly shipped to the importers at the desired destination and secondly only those goods, which are permitted for import and export under the corresponding countries would be contracted under this system, he said.

The Unisame Council experts said they had always been the first to think of ways and means to facilitate businessmen.

Unisame has introduced the escrow system and merchant accounts for online ecommerce in Pakistan and now it will be the merchanting business, if the SBP earnestly supports it in letter and spirit, Thaver added.