KARACHI: The State Bank of Pakistan (SBP) on Tuesday authorised banks to register all foreign currency (FCY) loans irrespective of the amount.

The move will facilitate the corporate entities for raising foreign currency loans from abroad besides improving the business environment in the country, the central bank said.

Previously, it was required to register the loans above $1 million with Exchange Policy Department of the SBP whereas the loans up to $1m were handled by the respective banks.

According to new instructions, the respective banks will register the FCY loans irrespective of the amount. However, the banks will have to ensure that the FCY loans are in compliance with the relevant laws and regulations in force.

“The minimum tenor of FCY loans, raised by corporate entities for working capital needs and by the banks for liquidity management purposes, has been reduced to one month,” said the SBP.

In order to implement these changes Foreign Exchange Manual has been revised and circulated. It is expected that these initiatives will help the corporate entities to meet their business needs and will reduce their turnaround time in raising financing from abroad thus promoting the ease of doing business, said the SBP.

Published in Dawn, December 18th, 2019