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SBP amends forex rules for IT firms, freelancers

KARACHI: The State Bank of Pakistan (SBP) has amended its foreign exchange regulations, advising banks to mandatorily allow retention of 35 percent of export proceeds of information technology (IT) companies and freelancers in their special foreign currency accounts till March 31, 2023, a statement said on Friday.

The instructions would be reviewed in the light of incremental export performance by IT sector and realisation of export proceeds thereof during the said period, the SBP said in a circular.

“The SBP has advised banks to provide digital channels for opening and operation of these accounts. Banks can now provide facilitation of outward remittances from the retained proceeds through issuance of corporate debit cards after conducting necessary due diligence,” said the SBP’s statement.

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

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 SBP.

The central bank has taken the decision to encourage IT companies and freelancers to bring their foreign exchange earnings into the country.

Furthermore, the SBP has advised banks to institute a mechanism for facilitation and speedy resolution of the customers’ complaints. Banks are required to nominate focal persons at head office level, and designate an appropriate officer at each branch dealing in foreign exchange business. Exporters can also approach to share their suggestions and concerns.

The amendments would incentivise new entrants in the field to focus on exports and enable existing exporters to boost their business that in turn would create employment opportunities and increase foreign exchange earnings of the country,” the central bank said.

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