KARACHI, Aug 9: Foreign airlines operating in Pakistan will now be repatriating foreign exchange earned here through sale of tickets twice a month, under the latest ruling by the State Bank. Previously, they were allowed to make once-a-month repatriation of such funds.

The SBP notified this decision to all banks on Tuesday through a circular which said that the move was aimed at further liberalizing foreign exchange rules. The circular said that airlines were allowed to repatriate their sale funds (surplus) twice a month on receipt of payments from travel agents.

Senior bankers say this would help foreign airlines streamline their financial operations here but would not have any impact on Pakistan’s external sector. The amount of foreign exchange these airlines would be remitting abroad would remain the same...they would only be make the repatriation in two instalments instead of one in a month. “So, on balance the decision would not have any adverse impact on our external sector,” said a seasoned local banker well-versed with the subject.

Travel agents say the decision would improve Pakistan’s image as a destination for foreign airlines. “The decision would be a major plus for the airlines planning to start operations in Pakistan,” said Yahya Polani, a member of the managing committee of the Pakistan Travel Agents Association.

Mr Polani, who also heads the aviation sub-committee of the Federation of Pakistan Chambers of Commerce and Industry, said the SBP move was a timely response to foreign airlines’ demands.

He said the decision would be particularly beneficial for major foreign airlines having a handsome share in Pakistan’s air traffic, including Emirates, Saudi Airline, Gulf Air, Qatar Airways and Thai Airways. Mr Polani said more than two dozen foreign airlines operated in Pakistan, claiming a combined market share of over 70 per cent in the country’s international air traffic.

The foreign airlines will also be benefited by the simplification of procedure laid down for the repatriation of their surplus sale proceeds abroad.

The SBP circular says that they will no more be required to submit photo copies of tickets/coupons or airway bills to their banks at the time of requesting repatriation of funds. The circular has also removed the requirement of submission of foreign currency encashment certificate for repatriation of cargo revenues. The foreign airlines have been allowed to submit this certificate and all other supporting documents to their banks within 120 days after departure of the cargo.

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