The State Bank of Pakistan withdrew the need for pre-approval of imports and instructed banks to prioritize the import of essential items such as food, pharmaceuticals, and energy, to aid in the facilitation of business.
The central bank has advised banks to provide a temporary facility to all authorized dealers to clear up import payments.
This is because a large number of imported items (including perishable items) are stuck inside shipments at ports due to delays from banks, says a new circular shared by the SBP on Monday to Authorized Dealers (AD) of Foreign Exchange.
The circular from SBP does not share the exact amount of shipments piling up at ports, but confirms that the information comes from ”relevant stakeholders, including various trade bodies and chambers of commerce.”
These items are grounded due to delays in the release of shipment documents from banks, says SBP.
In order to resolve the situation, SBP said that some importers should be allowed to extend their payment terms following negotiations with relevant suppliers, or they should arrange the necessary funds from abroad to settle their payments.
The central bank added:
Authorized Dealers (ADs) may process such import transactions provided goods have already arrived at a port in Pakistan or have been shipped on or before January 18, 2023, as evidenced from bill of lading/airway bill.
These terms are subject to the following conditions:
- In case of deferred payments, ADs should ensure receipt of a swift message from the bank abroad that imports are on a deferred payment basis for at least 180 days.
- In the case of arranging funds from abroad, ADs should process import transactions after receiving confirmation from the supplier’s bank.
However, this is only a temporary facility that will be available until March 31, 2023, to clear up the backlog of shipments piling up at ports in Pakistan.
SBP says that ADs should also educate customers about notifying their banks before initiating any import transactions to avoid complications.