Advisor to the Prime Minister on Commerce, Abdul Razak Dawood, has accepted the recommendation of the Pakistan-Afghanistan Joint Chamber of Commerce and Industry (PAJCCI) to set up banking counters on the Pak-Afghan border.
The advisor promised President PAJCCI, Zubair Motiwala, that progress regarding banking counters will be visible within a week, reported Dawn.
Razak Dawood said that trade in perishables and poultry is allowed in local currency. He added that pharmaceuticals and rice were under consideration by the authorities, and PAJCCI will be updated regarding any updates in the policy.
He revealed that the State Bank of Pakistan (SBP) had issued a notification as per the instructions given by the Ministry of Finance (MoF), and the PAJCCI could discuss the cash-on-counter facility with it.
The advisor stated that the government of Pakistan would internally deliberate these issues and discuss the relevant issues with the Afghan government and announce what policy should be adopted to enhance trade and economic activity with Afghanistan.
A press release issued by PAJCCI states that the government had shared a list of 40 items with the Afghan government, but it had not received any response from the neighboring country.
President PAJCCI apprised the advisor of the issues that would affect the trade with Afghanistan in the long term. He suggested that both countries should develop a system for barter trade. He opined that the countries should promote trade in local currencies and suggested the withdrawal of the cash-on-counter facility.
Motiwala also pointed other issues such as the requirement of advance payments, the unwillingness of correspondence banks to accept third-party payments in the case of Afghanistan, and congestion on the border.
He said that Afghanistan lacked an operational banking system and dollar reserves. He added that the traders were not allowed to carry more than Rs. 10,000 through the border, meaning that cash payments cannot be made. This would result in traders buying dollars in Pakistan and impact the country’s foreign exchange reserves, he stated.
He further stated that the business community understood the international laws given by Financial Action Task Force (FATF), however, trading in rupees was the only solution given the condition of the Afghan economy.
Motiwala recommended that bank counters on the Pak-Afghan border should be established to ensure on-the-spot payments without delayed shipments and border congestion.