KARACHI, Oct 3: The State Bank has allowed outward remittance of royalty/franchise and technical fee or service charges also in the financial sector.

The manufacturing and services sector are already allowed to make payments outside Pakistan on account of royalty/franchise and technical fee, etc.

A circular issued by the central bank on Thursday made some changes in the Foreign Exchange Manual for this purpose. The circular said that one-time lump sum upfront royalty/technical fee or franchise fee should not exceed $500,000. It said that this would be allowed from the inter-bank market.

The circular said that continuing royalty payments/service or technical charges/commission or handling charges or any other directly related charges not exceeding 0.25 per cent in customers billing would be allowed. This would either be recovered from the customers or met through the financial institutions own resources. “No foreign exchange would be provided or utilized for this purpose from the inter-bank market.”

The permission granted to the financial sector covers all banks and non-bank financial institutions including modarabas; leasing companies and investment banks, etc.