SBP Wants Banks to Properly Monitor Finances of IT Companies

State Bank of Pakistan (SBP) has directed all commercial banks and money transfer agencies to monitor remittances and authenticate the source of funds/modes of transactions of the customers and companies with a business of software exports.

In its recent circular issued, it said banks and foreign exchange dealers and money transfer agencies (authorized dealers) should conduct customer due diligence, maintain a profile of the company and customers of IT industry in pursuance of regulations under Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT).


What is FATF and What Does Pakistan’s Inclusion in Its Grey-list List Mean?

Banks and authorized dealers are advised to maintain the consolidated data for such transactions at their head offices and produce to SBP teams during the course of an inspection. They also need to ensure proper reporting of computer and information services under the specified purpose codes in their monthly foreign exchange returns to the State Bank.

Banks and authorized dealers should facilitate software exporters – the registration requirement for software houses/companies with the respective area office of Foreign Exchange Operations Department, SBP Banking Services Corporation is being dispensed with.

They shall, interalia, obtain a copy of software export agreement or invoice besides obtaining a prescribed statement of export earnings from the software exporter on monthly basis.


Politicians Against SC Committee’s Recommendations on Curbing Flow of Black Money

According to the updated Foreign Exchange Manual, Software houses/companies will get themselves registered with the concerned area office of the Foreign Exchange Operations Department, SBP-Banking Services Corporation.

It is permissible for exporters of software to retain amounts up to 35% of their export earnings in Special Exporters Foreign Currency accounts opened with the Authorized Dealers exclusively for payment of commission/discount to the overseas agents/buyers and to use the same to meet other expenses such as promotional activity, import of Hardware/Software, foreign consultant’s fee etc.

Software houses, entrepreneurs and freelancers working with foreign clients could get their remittances registered against IT services with the forms available here.

  • The SBP is so disconnected on how money is actually used locally and internationally and how it flows from here to abroad, it is not even funny anymore. These Babus are pathetic. No wonder exports are going down each year. It is a propped up economy based in Ishaq Dar’s infamous statistics fudging.

    Legitimate businesses simply cannot afford to comply with all these BS regulations and limitations from SBP and FBR whose sole focus are the large industrial units and cash cows. If they do comply, they will become uncompetitive against their local and international competitors.

    • SBP policies is one of the major reason that banking in Pakistan is stable even in bad times. Fake imports and exports is big tool of money laundering. Although exports are good for country but using illegal tools for payments makes it bad for country. SBP is doing good here and should keep on implementing checks on money laundering.

    • This is not the only front where SBP has stupid policies. It is these kind of policies due to which businesses such as PayPal, Amazon and eBay will never ever enter into Pakistan. We will keep using 50 year old banking system. If it was up to SBP, there wouldn’t even be any ATMs or Debit Cards because they want biometric cash deposit and withdrawals now. That’s insanity.

  • Ltd feature videos

    Watch more at LTD