Pakistan’s central bank on Friday relaxed rules for imports as it reduced the requirement for advance payments by traders to 25% at the time of initiating an import order compared to 100% in the past three months.
Banks were required to maintain 100% cash margin against certain (177) items of import, regardless of the duration of deferred import payment.
“In this regard, it has been decided to relax the 100% cash margin requirement where the credit terms of import are more than 90 days,” the State Bank of Pakistan (SBP) said in a notification on Friday.
Accordingly, banks would acquire 25% import payment in advance on 177 items, if they are scheduled to make deferred import payment in 91 to 180 days from the time of placing an import order (opening of Letter of Credit – LC).
Traders are required to submit zero import payments in advance, if their import payments are due after 181 days from the time of initiating an import order.
“The cash margin requirement shall be applicable to the Pak rupee equivalent amount of the import transaction,” the notification stated.
Earlier, the central bank had increased the amount of advance payments to 100% in April. The instructions were supposed to last till December 31, 2022.
The central bank reported the foreign currency inflows from overseas Pakistanis through their Roshan Digital Account (RDA) increased by around $200 million to $4.8 billion by the end of July compared to $4.6 billion by June 30, 2022.
Almost 64% (or $3.1 billion) of the gross RDA inflows were invested in Naya Pakistan Certificates (NPCs) by the non-resident Pakistanis. Other inflows were invested in the stock market, used as down payment to buy a car and/ or home on bank financing, or deposited in their accounts.
Published in The Express Tribune, August 6th, 2022.
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Originally published at tribune.com.pk