ISLAMABAD: In order to facilitate the IT exporters, and to boost the exports of IT and IT-enabled services, State Bank of Pakistan (SBP) has increased the permissible retention limit from 35% to 50% of their export proceeds in the Exporters’ Specialized Foreign Currency Accounts (ESFCAs).
According to a circular issued by the Exchange Policy Department (EPD), of the SBP, exporters were only allowed to retain 35% of their net foreign exchange earnings in the form of foreign currency in their ESFCAs.
Further, the usage of the balances available in the ESFCAs has been simplified by allowing the IT exporters to make their payments from these accounts without any approval from SBP or their banks.
The banks have also been advised to facilitate issuance of debit cards, enabling the IT exporters to make online payments from the balances available in their ESFCAs.
Moreover, a new framework for freelancers has been introduced to further ease the opening of their bank accounts and allow higher retention of amounts in their foreign currency accounts (FCA).
The freelancers will now be able to open the bank accounts both digitally and physically, with minimum documentation requirements. Further, their own FCAs shall be opened concurrently with the opening of their primary PKR accounts.
The freelancers can retain 50% of their earnings or USD 5,000/- per month, whichever is higher, in their FCAs and will be able to make all payments from these accounts without any approval from SBP or banks.
The new step comes on the back of a large number of people keeping their forex earnings offshore, rather than bringing it inside the country. Not only does a higher retention option hedge the exporter against currency risks, but also facilitates overseas transactions.
