KARACHI: The State Bank of Pakistan (SBP) has reversed its earlier decision to reduce the time period from 180 days to 120 days to bring exports proceeds into the country.

In a circular issued on Jan 5, the SBP said that full export value of goods exported from Pakistan and declared to the Customs authorities should be received in an approved manner, on the due date for payment or within one hundred and twenty (120) days from the date of shipment, whichever is earlier.

However, a circular issued on Feb 1 by the SBP clarified that amendments introduced through the earlier FE circular shall not be applicable on such exports where irrevocable letters of credit with usance (time for payment of foreign bill) period up to 180 days were issued or established up to the date of issuance of above instructions.

Exporters can now bring back earnings in 180 days instead of 120 days

This decision was taken in view of the representation received from various Authorised Dealers (ADs), Chambers of Commerce and Industries and Exporters’ Associations, and to help exporters to fulfill their commitments, said the SBP.

However, in all such cases ADs shall not allow any change beyond 180 days in shipment date/expiry of LC/enhancement in LC or shipment against expired LCs or any other terms and conditions relating to tenure of the LC after the issuance of the circular, it added.

Moreover, where the terms of sale or irrevocable letter of credit provide for payment on 120 days’ usance from the date of shipment, it shall be permissible for the exporter to repatriate the export proceeds within 135 days from shipment date.

Exporters usually complain that the SBP takes decision without consultation of relevant sector or stakeholders which creates problem. The exports proceeds are prime focus for the government in the wake of increasing need of foreign exchange and declining reserves of the SBP.

Published in Dawn, February 3rd, 2022