Government introduces new rules for Pakistanis with foreign currency in their bank accounts
A foreign currency account may be credited through transfer from another individual foreign currency account.
In an interesting new development, the Ministry of Finance has imposed major restrictions on Pakistanis having foreign currency in their accounts. The ministry issued ‘foreign currency account rules 2020’, which have been put into practice from the 9th of October, 2020.
The rules stated that the foreign currency of an individual may be credited with the remittance received from abroad through banking channel except:
- payment for services rendered in or from Pakistan
- proceeds of securities issued or sold to non-residents
- any foreign exchange borrowed from abroad under any general or special permission of the SBP; given that the SBP may issue any general or special permission to credit the account
- payment of goods exported from Pakistan
The new regulations
Under these new rules, a foreign currency account will not be credited with any foreign exchange that will be purchased from an authorized dealer, exchange company, or money changer except as allowed by the SBP through general or special permission under any law. However, the currency that is brought from abroad and declared at the point of entry into the country with the Pakistan Customs may be credited in the account.
On the other hand, there are no restrictions on cash withdrawal or transfer from the foreign currency account. The regulations state that the federal government was making those rules due to powers given 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 made on account of profit, return and the principal amount of investment made in any foreign currency-denominated or foreign currency linked scheme of the Pakistani government may also be credited in the account.
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