The State Bank of Pakistan (SBP) has allowed non-resident Pakistanis and non-residents holding Pakistan Origin Cards (POC) to open Foreign Currency Value Accounts (FCVA).
POC holders are former Pakistani citizens who do not hold Pakistani nationalities but have remained Pakistani citizens their entire lives. They enjoy visa-free entry into Pakistan and can buy property here. Now, they can also open local bank accounts and invest in various ventures. For this, the banking regulatory has issued amended instructions regarding the foreign currency value account (FCVA) in a recent circular.
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Moreover, under the foreign exchange manual, banks are required to report inward remittance transactions (excluding family maintenance and exports) that exceed $10,000 on Form R to the SBP. Form R is a declaration regarding receipts above Rs10,000 for purposes other than exports and family maintenance.
“It is advised that instead of asking the customer to provide duly filled in Form ‘R’, the bank receiving remittances in FCVA exceeding $10,000, or the equivalent thereof, may digitally obtain the information, required for filling Form ‘R’, from the customer/remitting bank, if not already available in the transaction detail, for the purpose of reporting of transactions to the SBP,” the circular added.
A person seeking to purchase foreign exchange must lodge an application with an authorized dealer (banks and exchange companies) on Form M to get approval to effect outward remittances.
However, in the case of Non-Resident Value Accounts (NRVA), as no approval is required for NRVA holders to repatriate funds from his/her account, Form M will not be required for payment/repatriation of funds from NRVAs.
Nonetheless, authorized dealers/banks will continue to report outward remittances under the specified purpose code through monthly foreign exchange returns to the SBP as per the existing procedure.
