SBP To Lift LCs Restrictions on Import Next Month

The State Bank of Pakistan (SBP) has decided to withdraw the prior approval needed for banks for initiating import transactions.

According to a circular issued on Tuesday, the SBP has invited the attention of the banks to Circular letter No. 9 of May 20, 2022, and Circular letter No. 11 of July 5, 2022, wherein banks were required to seek prior permission from Foreign Exchange Operations Department SBP-BSC before initiating any import transaction pertaining to HS Code Chapter 84, 85 and certain items of Chapter 87.

According to the circular, it has now been decided to withdraw the above instructions with effect from January 2, 2023.

Consequently, requests for import transactions already submitted to SBP-BSC pertaining to the above-referred HS Codes stand returned to the banks for appropriate disposal at their end.

However, the banks may prioritize/facilitate the imports, as under:

• Essential imports: Imports related to essential sectors such as food (wheat, edible oil, etc.), and pharmaceutical (raw material, life-saving/ essential medicines, surgical instruments including stents, etc.)
• Energy imports: Imports related to petroleum group (oil and gas) and coal (for power projects based upon merit order of Ministry of Energy).
• Imports by Export-oriented Industry: Imports, especially of raw materials, input goods and spare parts, by the export-oriented industries.
• Imports for Agriculture inputs: Import of items required as input for agriculture (seed, fertilizers and pesticides).

Deferred payment/self-funded Imports:

Imports on a deferred payment basis, preferably from parents/sister concerns of the importers, beyond 365 days, from shipment date.

Imports funded by foreign exchange available with the importers raised through equity or project loan/import loan from abroad, in accordance with the applicable Foreign Exchange Regulations.

Import for export-oriented projects near completion: Import of plant & machinery for export-oriented projects near completion where at least 75 percent of the project’s plant and machinery has already been imported.

“The bank may actively engage with all their customers to process their requests, keeping in view the customers’ risk profile and liquidity conditions prevailing in the foreign exchange market,” added the SBP circular.