KARACHI: Exporters have urged the State Bank of Pakistan (SBP) to restore the facility of advance payments of up to $10,000 per invoice for import of all eligible items without the requirement of Letter of Credit (LC) or bank guarantee to suppliers abroad.

The SBP on July 14 withdrew from the authorised dealers the facility of sending advance payments of up to $10,000 per invoice for import of accessories generally used by exporters on export goods.

Pakistan Leather Garments Manufacturers and Exporters Association Patron-in-Chief Fawad Ijaz Khan said that leather garments and goods’ manufacturers and exporters use this facility to import trimmings mostly from China and Hong Kong.

Most of these imports are in very small amounts as they include items like labels, zippers, buttons, rivets and even suppliers don’t ask for opening of LCs. Rather, they insist on advance payments before they start the production of order.

It has been mentioned in the SBP circular that in case the authorised dealers deem that a request on sending advance payment is genuine, they may approach SBP along with appropriate recommendations on a case-to-case basis.

100pc cash margin on 132 items

The SBP said on Monday it has decided that banks will obtain 100 per cent cash margin on the import of 132 items with immediate effect.

The State Bank has been making efforts to reduce the negative impact of increasing import bill on the current account deficit which has consumed the bulk of its foreign exchange reserves.

Pneumatic tyres for bus, motor cycles (old, used or reconditioned) and cars, CNG kits for vehicles, air conditioning machines and diapers etc are included in this list.

Published in Dawn, July 17th , 2018