SBP Allows Banks to Process Remuneration Remittances Without Prior Approval

The State Bank of Pakistan (SBP) has allowed banks and other financial institutions to process remittances for remuneration to non-resident directors, chairmen, Shariah advisors, and Shariah scholars without seeking prior approval, subject to completion of the required documentation.

According to the circular, remuneration may include meeting fees, travelling allowances and daily allowances (TA/DA), retainers, and other payments as per the remuneration policy approved by the board of the regulated entity.

Before effecting such remittances, banks are required to conduct due diligence to ensure compliance with SBP’s instructions regarding remuneration for board members, Shariah advisors, or Shariah scholars, and to keep the following documents and information on record:

• A copy of SBP’s valid approval for appointment/FPT clearance as a director, chairman, or member of the board, including the Shariah Board.
• A copy of the board-approved remuneration policy or board resolution specifying the entitlement, denominated in Pakistani rupees.
• Confirmation of attendance at the meeting(s) for which the payment is being made, where applicable.
• Supporting travel documents for TA/DA claims.
• Duly filled-in required forms.
• Proof of deduction of all applicable taxes.
• Any other document deemed necessary by the authorized dealer.